Church Calls for High Cost Loan Curbs

Thursday July 11 2013

The Convener of the Church of Scotland’s Church and Society Council has today written to all Scottish MPs and urged them to come together to tackle the issue of high cost credit.

The Church of Scotland has long criticised the extortionate interest rates charged by payday lenders.  The 2012 General Assembly called for a legally binding maximum interest rate for all kinds of consumer credit, to be set initially at an APR of 40%.  

A Bill regulating high cost credit providers, setting controls on advertising and the cost of such arrangements, receives its second reading in the House of Commons tomorrow. In her letter, the Rev Sally Foster-Fulton urges MPs to support the Bill.

She says: “The economics of our society is badly wrong.  Payday lenders who levy extortionate charges and rates are exploiting the most vulnerable.

“We need alternatives for affordable credit for people on lower incomes, as well as a fundamental reform of our current economic system.  After the financial crisis many people said that we could not return to business as usual.  Ensuring that reasonable and responsible financial services are available to everyone, especially the most marginalised, is essential.

“The Church of Scotland is on the side of the most vulnerable in society because we believe that there is a Gospel bias to the poor.”

The Money Advice Trust has reported that last year, they received over 20,000 calls for help with payday loans, a 94% year on year increase.

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