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-   -   Church working against Pay-Day Loan lenders (https://www.englishforum.ch/international-affairs-politics/209728-church-working-against-pay-day-loan-lenders.html)

Sbrinz 28.05.2014 20:32

Church working against Pay-Day Loan lenders
These are "popular" in the UK. Typically the loan is less than 10'000 and for less than a month.
However they are unsecured and not regulated, and interest rates can be VERY high. http://www.bbc.com/news/uk-25085299

Many poorer, unfortunate people, find they are paying 700 interest on a 1200 loan !!

Now there might be some unusual competition, good advice from the Church of England !
The church hopes to be able to steer people to credit institutes which are more honorable. http://www.bbc.com/news/business-27589517

Tasebo 28.05.2014 20:56

Re: Church working against Pay-Day Loan lenders
Maybe Justin could invite Mike Gove over for lunch and a chat on how to benefit people instead of further demoralise them:(

mossie 28.05.2014 21:50

Re: Church working against Pay-Day Loan lenders
When you see the interest rates on those ITV ads, its criminal as you see who they are directed at.

Pancakes 28.05.2014 21:54

Re: Church working against Pay-Day Loan lenders
Every time I go back to the US to visit now, I am astounded by the number of these "walk-in loan shops" there are.

It makes me sick -- the thought of anyone capitalizing on the poverty of someone else.* These things really need to be regulated.

* I feel that the lottery does that, too.

threaded 28.05.2014 22:55

Re: Church working against Pay-Day Loan lenders
"Pay-day Loans" are a very interesting subject. For starters there is a 'need' e.g. someone with no spare cash has to pay a sudden bill: where does the money come from? i.e how do the poor achieve liquidity?

These loan companies have no competition apart from each other so they can pretty much charge what they want and generally are only limited by local laws. Why is it that huge high-street banks are so inefficient they cannot compete with these, often, one-man band loan sharks? Where has the efficiency of scale disappeared? :mad:

It is not uncommon to find unlicensed lenders actually offer much better deals than the licensed ones (a search through the law reports will show as much). So people complaining about pay-day lenders have actually caused the cost to the borrower to increase. i.e. if that god-botherer really wanted to help he should shut up and give charity to the needy. :rolleyes:

Another factoid: most loan-sharks are women. Is there not something about the male dominance in society, especially finance, at work here...;)

Obviously people have a knee jerk about usury but the fact is that when there have been natural disasters it has been found that communities recover quicker the higher the legal limit to the interest rate/charges.

Contrary to another poster's comment in the UK there is regulation and the Financial Conduct Authority (FCA) is constantly tweaking things. IIRC even the Advertising Standards got in on the act once. However the FCA are stuck between a rock and a hard place. If they regulate too heavily the loan companies shut down and the poor are denied liquidity which leads to an 'increase in crime'. (The reason for the quote marks: did you know many incarcerated women's first brush with jail the spiral starts with not being able to pay the TV license? By extension if they got rid of the TV license for 25-44 y.o. women then the female prison population would start to fall). Conversely if the FCA regulate too lightly the pay-day loan companies pull all sorts of tricks to increase their profits.

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