Agenda item

To consider the following motion:

·  Motion 1 – Payday Loans.

MOTION 1 - PAYDAY LOANS

(See pages 15-16 of the main agenda)

The guillotine having fallen, Councillor Martin Seaton, seconded by Councillor Kevin Ahern, formally moved the motion.

Councillor Darren Merrill, seconded by Councillor Mark William, formally moved Amendment E.

Amendment E was put to the vote and declared to be carried.

The clerk announced that as Amendment F was substantially the same as part one of Amendment E, Amendment F therefore fell.

The substantive motion was put to the vote and declared to be carried.

RESOLVED:

1.  That council assembly notes the large number of “payday loan” shops in the borough; particularly in Peckham and on the Walworth Road.

2.  That council assembly notes that the interest rates charged on these loans can often be in excess of 2000% meaning that the average borrower ends up paying far more than the original cost of the loan.

3.  That council assembly believes that charging such large interest rates on loans to often financially vulnerable people is exploitative and takes money away from individuals and families at a time when the cost of living is rising.

4.  That council assembly also notes that many lenders use underhand means to lure consumers into automatic loan renewals, fail to disclose the true cost of the loan, or use other usurious tactics to sink consumers in a quagmire of debt.

5.  That council assembly believes lending of this kind is both socially and financially irresponsible and a scourge on our communities. It condemns the prevalence of these businesses on Southwark high streets and calls for alternative low cost loans to be made available to our residents.

6.  That council assembly believes this is an issue of concern to people across the political spectrum and calls for all political parties in Southwark to support and prioritise alternative affordable models of lending, particularly those provided by London Mutual Credit Union.  Council assembly welcomes the proposal by London Mutual Credit Union to introduce a new affordable loan which will be available to Southwark residents and calls on all members to contribute their views on this issue.

Note: This motion will be referred as a recommendation to the cabinet for consideration.