Politician criticises Government for failing to back money lending cap (From Haringey Independent)

Politician criticises Government for failing to back money lending cap

3:50pm Thursday 24th May 2012 in News By Hermione Wright

A Haringey politician has criticised central Government for failing to back a proposal to limit the amount of interest money lending shops can charge their customers.

The bill, put forward by MP Stella Creasy on Tuesday night, could have capped the interest pay day loan companies and money lenders can charge their customers.

Cabinet member for finance, Labour councillor Joe Goldberg, said: “With the country now back into recession, more and more families in Haringey have to resort to pay day loan companies like Wonga to pay the bills at the end of the month.

“A cap on interest rates would make a real difference - allowing people to slowly work their way out of debt rather than constantly taking out new loans to make ends meet.”

At this stage, there is no limit on the amount of interest a money shop can charge its customers, with most offering loans with interest rates ranging between 1,500 per cent and 7,000 per cent.

The London Capital Credit Union Ltd, formerly known as the Haringey, Islington and City Credit Union, protested outside money lending shops in Wood Green last month to raise public awareness about the high levels of interest the companies can charge.

The credit union were also promoting their own service, which offers people who live, work or study in Haringey low-cost loans by pooling the contributions of its savers when they are most in need.