MPs demand tighter rules for payday loan firms
MPs have called for tougher regulation of companies that issue short term ‘payday’ loans.
In a report published today the business, innovation and skills committee, which scrutinises the work of the department of the same name, calls for the government to introduce tougher controls for the sector.
It recommends that the government should:
- limit the rolling over of payday loans
- ensure providers record all their transactions on a database
- make sure the regulator addresses payment mechanisms
- act swiftly on a recent Office of Fair Trading report on the sector.
The government has to respond to the report stating whether it will accept the recommendations.
Committee chair Adrian Bailey, who is Labour/Co-operative MP for West Bromwich West, said: ‘During these difficult economic times, increasing numbers of people up and down the country—not least some of the most vulnerable members of our society—are relying on the provision of consumer debt management services and payday loans to make ends meet.
‘And yet this industry remains opaque and poorly regulated. Despite a government consultation that ended almost a year ago little has been done to remedy the situation. The government must take swift and decisive action to prevent firms from abusing the needs of such a vulnerable customer base.’