Payday advance lenders in the UK have been put on notice of an impending clampdown on a proportion of its more controversial lending practices, industry experts recently reported.
Consumer affairs minister Ed Davey has said he would like to limit the ability of instant cash loan providers to debit their customers bank accounts directly. The Liberal Democrat has also said he would like to see credit unions used for short term loans instead of short term loans.
In a recent interview, Mr Davey had strong words for critics who claim that the regulatory regime of the UK was too soft on payday lenders, which have been experiencing a recent surge in activity – especially from low income earners. Stating that the Government was ‘hyperactive’ on the issue, the consumer affairs minister was quick to claim that a problem exists, one which he blamed on the Labour government, calling the legacy a ‘disastrous’ one.
However, the Liberal Democrat’s focus is less on seeking fresh legislation and more on working hand-in-hand with the industry to institute improvements to its standard practices. Mr Davey commented that any policy responses made in haste could backfire and push even more Brits into suffering the tender ministrations of illegal loan sharking operations.
Remarking that the importance of getting things right was high, the consumer affairs minister admitted that Brits need this access to cash. He said that it needs to be kept in mind that a large number of these payday lenders do not operate in an exploitative manner, and actually offer very good services to their customers.