The finance chief for a local authority has come out against using short term loans, instead counselling families in dire financial straits to take advantage of the credit union within the borough instead, short term loans experts say.
Haringey Council member Joe Goldberg, the council’s finance cabinet member, drew attention to the local credit union launched in 2011 at a recent budget meeting, adding the warning that providers of no credit check short term loans were unwelcome in the community.
The Haringey, Islington and City Credit Union, launched this past March with backing from the local authority. Since then it has given cash loans to more than 4,000 individuals in the borough, the not-for-profit scheme reported.
The credit union, which was six years in the making, had been launched to counteract what the council saw as an untenable number of payday lenders that have opened their doors in Tottenham and Wood Green. Detractors of the payday lending industry are often highly critical of the high interest rates charged by lenders, even though proponents point out that assigning an annualised rate to a short term loan results in massively inflated percentage rates as high as 3,000 per cent or more.
Taking on inequality is not just about skills, jobs, and housing, Cllr Goldberg said, adding that providing fair financial support to everyone is critical. Doing so prevents people from falling prey to unethical lenders that charge exploitative interest rates that make repayment a near impossibility, the finance chief also said.