Minutes:
It was then
RESOLVED - This Council notes -
· The scourge of Pay Day Lenders preying on vulnerable people and exploiting them with extortionate interest rates on short term loans.
· The damaging impacts irresponsible lending can have.
· That one in three pay day loans are taken out to pay off another pay day loan.
· The recent summit held by the Office of Fair Trading in advance of the Financial Conduct Authority assuming responsibility for this sector next year, which highlighted restrictions in advertising as one measure which may be introduced as Pay Day Lenders face tighter regulation.
· The recent comments of the Secretary of State for Business, Innovation and Skills, who recently visited Stockport Credit Union, on the role of competition from Credit Unions to challenge Pay Day Lenders’ ability to charge such high interest rates.
· The provision within the Consumer Credit Act 1974 (as amended) for “unfair credit relationships” to be set aside.
This Council further notes –
· The alternative sources of financial support and advice available to people in financial difficulty, such as Stockport Credit Union and Stockport Citizen’s Advice Bureau.
· The extensive work already underway by which the Council and its partners, most notably Stockport Homes, to help Stockport Credit Union develop into a responsive lender with a range of flexible lending options.
· Stockport Homes’ agreement to fund a new post of Development Manager for 12 months to help Stockport Credit Union increase its capacity and its range of products.
· The variety of other financial inclusion work carried out by this Council and its partners.
· This Council believes that it has a duty to speak out against threats to our communities and that irresponsible Pay Day Lenders pose such a threat.
However, this Council also notes –
· the scourge of “Loan Sharks” who prey on vulnerable residents;
· the good work undertaken over many years by officers of this Council and our partners to tackle “Loan Sharks”, such as the highly successful “month of action” run in Brinnington last year;
· the vital need to ensure that any action taken to deter residents from using Pay Day Lenders does not push them towards even worse sources of finance.
This Council therefore requests that –
· Officers prepare a report for the October Council Meeting assessing the likely impact of blocking access to Pay Day Lenders’ websites on all Council-owned computers and on all devices within Council-owned buildings, both in the light of the experiences of other Councils and with respect to pushing residents towards "Loan Sharks", so that this Council can then make an informed decision on how best to proceed.
· Officers ensure that our libraries and advice staff are aware of how best to signpost residents to information about Stockport Credit Union, Stockport Citizen’s Advice Bureau and other responsible financial advice websites.
· A joint letter is sent from the Group Leaders to the Chair of the Transport for Greater Manchester Committee pointing out that it is unacceptable for Pay Day Lenders to be allowed to advertise at bus stops, at Metrolink stations or at any other TfGM owned sites, requesting that any such adverts be removed as quickly as possible and that a policy be introduced to ensure that similar adverts will not be allowed in these sites in the future, and asking him to investigate the possibility of offering instead free advertising space to the Credit Union active in each GM borough.
· Efforts continue to improve the capacity of Stockport Credit Union to assist local people at risk of exploitation by Pay Day Lenders.
· A campaign for improving access to information about financial planning is devised and implemented as soon as possible by the Council.
· Further “months of action” be conducted in areas considered to be vulnerable to Loan Sharks.
· A letter is sent from the Chief Executive to the Office of Fair Trading and the Financial Conduct Authority, urging them to work with the appropriate government departments to ensure that the provisions of the Consumer Credit Act 1974 are applied and that the courts be recommended to set aside loans wherever the annual interest rate exceeds 100%.”