Some councillors active on the Islington Borough Council are not all that happy about short term loans companies and their activities in the area and have been trying quite hard to get them banned by enacting a by law.
The council has been forced to halt its ban attempt because of legal hitches, but this has not stopped some of the councillors from staging their own demonstration outside one of the local payday lenders’ establishment in Islington’s main drag, the High Street.
The chairman of the council’s “fairness commission”, which the council is quite proud of, was on the demonstration too and commented on the legal problems they were having with their by law.
Councillor Andy Hull, the chairman, said that the legal issues surrounding banning the short term lenders from operating in the borough were quite tricky and their demonstration, while not actually able to get rid of the instant cash loan merchants served both as a warning to the industry and as an advertisement for what is seen as the better alternative for those saddled with debt burdens: the credit unions, one of which just happened to be around the corner from the demonstration.
Payday loans are usually small loans given out for short term periods only and can start to attract some very high interest rates quite quickly if they are not paid back on time.
The attraction of short term loans is that they are given out without the fuss and bother associated with the conventional lending industry. There are often no or very few credit checks and an online application process makes the whole business of getting one’s hands on some instant cash quite easy. For most people who are successful with their applications, the money can be in the bank account within an hour of applying.
The loans work quite well in many cases as long as they are paid back on time. The problems arise when the sort of people who think they are an attractive option find they cannot pay them back on time and their debt problems begin to gyrate out of control.
Funnily enough, the demonstration was actually staged by the arch rival to the payday companies: the locally based Islington Credit Union. These not for profit organisations, which have actually been around for quite a long time and are “owned” by their own customers, are beginning to play “fair princess” to the short term loans providers role as the “ugly sisters”.