Sinn Féin Spokesperson, Conor Murphy MP, (Newry/Armagh) commenting on the proposal by the Financial Conduct Authority (FCA) that Payday loan rates should be capped at 0.8% a day of the amount borrowed, said that although overdue it is a welcome development.
Conor Murphy said:
“The proposal that combined interest rates and other charges should not exceed the total amount borrowed and that rates should be capped a 0.8% a day will be welcome news for those unfortunate enough to have no other source of lending.
“There will also be a cap on default charges, which is likely to be set at £15.
"For the increasing numbers of people feeling that they have no other resource and struggle to repay these loans, this will provide some degree of protection.
"These lenders are literally cashing in on the dire economic straits that many people find themselves in, in the present economic climate.
When these companies advertise loans to make ends meet until the next pay day most often they are targeting people on benefits who are not fortunate enough to have a next ‘Pay Day’. Most of them are waiting on their next benefit cheque.
This is a form of exploitation of some of the most vulnerable in our society. At interest rates at times over 200% it is nothing short of loan sharking.
“As these companies are particularly active in the run in to the Christmas period when they know people are under financial pressure I hope that these regulations are in place before then.”