NEW PRODUCT RULES REQUIRED TO LIMIT THE DAMAGE CAUSED BY UNAFFORDABLE PAYDAY LOANS

Early day motion 279, tabled 19 June 2013 by Ann McKechin (Labour). Signed by 50 members.

That this House recognises the 12-week deadline for payday lenders submitting evidence to the Office of Fair Trading (OFT) addressing failings outlined in the compliance review of the sector has now passed; is concerned by the OFT’s finding that there is currently widespread irresponsible lending and lenders are failing to comply with the standards expected of them; notes the growing number of complaints to debt advice agencies and the Financial Ombudsman about problems with payday lenders; further notes that 36,413 people contacted StepChange Debt Charity for help with payday loan debt problems in 2012, twice as many as did in 2011; further notes that in the same period the average payday loan balance of a StepChange Debt Charity client rose from £1,267 to £1,657 and that this latter figure is in excess of the average income of StepChange’s clients which is £1,320; further notes that, in 2012, 7,221 people who contacted the Debt Charity had five or more payday loans and this figure has increased by a factor of 10 since 2009; calls on the OFT to take action now to make sure irresponsible payday lenders are stopped from trading; further calls on the Government to adopt a range of product interventions to limit the damage caused by unaffordable payday loans; supports the initiative of the hon. Member for Sheffield Central, to introduce a Private Member's Bill on the subject; and looks forward to a time where the amount that can be borrowed on high-cost loans is restricted to prevent borrowers becoming trapped by spiralling multiple payday loan debts.

Signatures by party: Labour 32, Liberal Democrat 4, DUP 3, Social Democratic and Labour Party 3, Independent 2, Alliance 1, Conservative 1, Green 1, Plaid Cymru 1, Respect 1, Scottish National Party 1.