The Mayor of London should play a key role in driving out loan sharks across London, according to a new report recently launched by Caroline, her London Assembly colleague Stephen Knight and Lynne Featherstone MP, at the London Capital Credit Union in Islington.
The report, "Payday London", sets out a number of policies that the Mayor could adopt to tackle the problems created by payday lending and illegal lending. By actively supporting the growth of credit unions, with low and capped interest rates, more Londoners could avoid resorting to lending at exorbitant interest rates and frequently entering a cycle of unsustainable debt.
The report's eight recommendations include the Mayor opening a credit union savings account for every secondary school starter and for further funding to be given to support the expansion of London's credit unions. The report also calls for the Mayor to actively encourage Londoners to join a credit union and for him to take a lead in ensuring planning regulations are changed to make payday loan shops require specific planning permission.
Behind the report's recommendations lies clear evidence of the unmet need for credit in London, with a quarter of a million Londoners needing to borrow but unable to do so at present.
Setting out why the expansion of credit unions is so needed, Caroline said:
"It is a harsh fact that where credit exclusion is greatest, payday companies and illegal loan sharks thrive.
"Borrowing is a reality of life for many people on a low income, but if people have no access to credit at low interest rates they are often driven into the hands of loan sharks.
"Despite Londoners having such an immense need for affordable lending the reach of credit unions is far less than in many other cities. At present just one per cent of the London population belong to a credit union, compared to 3% in Merseyside and 5% in Glasgow.
"It is high time the Mayor understood and monitored the problems caused by payday lending in the capital and invested in and promoted credit unions so as to curb the growth in payday lending and to drive out loan sharks from London."
For more information about the role that credit unions can play, see this recent article written by Stephen Knight for Lib Dem Voice.
Photo: (left to right) Cllr Terry Stacy (Lib Dem group leader on Islington Council), Lynne Featherstone MP, Stephen Knight AM, Caroline Pidgeon AM, Tahmid Chowdhury