Legal Loan Sharks - Dundee City Council Action

At the Policy and Resources Committee there was a report about what the report called High Interest Rate Lenders - I call them Legal Loan Sharks.  I was pleased to see the report before us as I have been campaigning about this issue for some time.

The report before us last night contained 3 recommendations I sought to amend the report to add a further two.  The original recommendations were:

It is recommended that Committee instructs the Chief Executive to :

a) write to the UK Government recommending that it introduces regulations to cap the interest rates charged to borrowers by high interest lenders

b) write to the Scottish Government requesting that it investigates whether there is any action it can take within its existing powers to assist people in debt due to the policies of high interest lenders

c) write to both Governments encouraging them to maximise support and investment in the expansion of the credit union movement

The two further amendments which I added were:

d)  to bring forward an action plan to promote Credit Unions within the City of Dundee.

e) write to the Scottish Government requesting that it examines its policies in relation to planning matters and whether it is possible to use planning legislation to prevent high interest rate lenders opening shops and if not to consider changing legislation to prevent the spread of high interest rate lenders'  shops.

The report before us was welcome as far as it went I sought to make an amendment which I believe makes the report more powerful.  I was pleased that my amendments were accepted.

We need to ensure that we take action which protects the people of Dundee from High Interest Rate Lenders.  These companies trade on the misery of others and we should be looking to bring in a cap on interest rates.  We should be looking to develop policies which help anyone in debt.  We should be calling on both the UK and the Scottish Governments to do all that they can to promote credit unions. 

I am normally against censorship but I did think that it was interesting idea that the council should look at blocking access to Legal Loan Sharks from any council computer.

My amendments would ensure that the City Council also does everything in its power to promote credit unions.  Credit Unions are important and they can provide a means by which people can help themselves.

In Dundee everyone can be a member of the Discovery Credit Union.  We should be promoting membership and we should be working with them to develop services for everyone in the city.  Credit Unions can and should provide services for everyone in the city.  In Ireland membership of a credit union is something like the same as the population.  In North America in New England the main financial institutions are credit unions.  We should be looking at ways of levelling the playing field between credit unions and high interest rate lenders. 

How can we get to the situation where it is credit union shops which are to be found on our high streets?  Some of these Legal Loan Sharks are within a couple of hundred yards of the council chamber.  How can we ensure that credit unions offer a full range of banking services?  How can we ensure that people understand that credit unions offer the best option, the more ethical option in financial services?  I think that the City Council could do more to promote credit unions.

I also think that we should be looking at ways of limiting the number of high interest rate lenders in our shopping areas.  I think that we should look at ways of doing this through our planning system.  Council officers are worried that we cannot do this, then I think that we should at the very least ask the Scottish Government to look at how this might be done.  I think that the Scottish Government should look to assist us by amending the law if need be so that we can either limit the number of high interest rate lenders on our high streets or better still prevent them.  I know that we want our high streets and shopping areas to be vibrant but I would ask if we mean that to be at any cost?

We should be sending out the message that we don’t support Legal Loans Sharks in Dundee and that they are not welcome to come here and trade on the misery of people here.

We can all do our bit by supporting credit unions and we can do our bit by calling on the UK and Scottish Governments to deal effectively with Legal Loan Sharks and promote credit unions.