Downing Street Says » Pay Day Loans

» Wednesday, December 7, 2011

Pay Day Loans

Asked whether the Prime Minister (PM) had concerns about the regulation of pay day lenders, the Prime Minister’s Spokesman (PMS), told the assembled media that there were concerns about the way these companies operate and that Government was working with consumer organisations and the industry to ensure vulnerable people were properly protected.

Asked for further detail on Government’s plans, the PMS said that the objective was to introduce a Code of Practice. He said the process was not straightforward and needed to be carefully planned so changes would not reduce people’s access to credit or drive them towards loan sharks.

Put that the Government might look to drive change through banks where it was a shareholder, the PMS replied that those banks operate at arms length but that Project Merlin was put in place to improve the flow of money to businesses and to families.

Asked whether a cap on interest rates for pay day loans might be introduced, the PMS said that Government was working with consumer organisations and the industry to find a way forwards.

Asked about cuts to credit unions, said that Government supported the work of credit unions as a trusted alternative and said that the Department for Work and Pensions would shortly be reporting on how this support could be taken further.

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