Payday loan moves welcomed

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Derry politicians have welcomed moves to control high interest payday lenders.

Earlier this week the Office of Fair Trading gave 50 payday lenders 12 weeks to to change their ways or risk losing their licences.

The city’s MP Mark Durkan says that move is to be “strongly welcomed.”

“This kind of lending – where greedy and unscrupulous loan companies prey on the financially excluded by offering easy credit at extortionate rates – has tipped so many people in Derry and throughout the North into inescapable cycles of debt and poverty.

“Whilst home-credit agencies, moneylenders and loan sharks are not a new phenomenon, in the current economic downturn they have become more prevalent, more pernicious and more profitable.”

His SDLP colleague MLA Colum Eastwood said the move was long overdue.

“In this age of austerity where difficulties of access to credit have become commonplace, it is essential that strict regulation is imposed upon companies who seek to make profit from those most vulnerable in our society.

“As was revealed only last week, Derry suffers from the highest rate of bankruptcy in the North. It therefore holds logic that the activities of these Payday loan companies are particularly targeted here.

“These actions by the OFT are, it has to be said, long overdue. Many people have fallen foil of the malpractice in this sector as they sat on their hands for the last number of years.”

He continued: “Nevertheless most will welcome this intervention which will hopefully act as a shot across the bow for those who provide loans with exorbitant amounts of interest attached.

“A person’s ability to repay any loan must act as the ultimate criteria as to whether their application is successful or not. This is only common sense. Unfortunately it has not been common practice.

“I would encourage anyone who finds themselves in a seemingly inescapable cycle of debt to seek help. They should not leave themselves at the mercy of the often aggressive tactics of debt collection agencies.”