The high-cost credit sector, made up of payday lenders, home credit providers and hire purchase agreements, is growing rapidly and increasingly causing many of its customers to get into severe debt problems. Stella has for some time been campaigning to introduce tighter regulation into this market in order to provide the protection that vulnerable consumers need. To read a briefing on this use, giving background and facts and figures, click here. Below is a timeline demonstrating how the campaign has progressed so far. To read what organisations are saying about regulating this market, click here.

3 November 2010 Stella’s Consumer Credit (Regulation and Advice) Bill is introduced to Parliament. The Bill sets out to impose certain limits on consumer credit interest rates and charges; to establish a levy on credit and debit card providers to fund the provision of debt advice services; to give powers to local authorities to restrict the provision of premises for licensed consumer credit agencies within a local area; to make provision regarding the availability of certain financial services products at branches of the Post Office; and to make other measures relating to the regulation of, and availability of advice on, consumer credit. The Bill passes its first reading unopposed. Click here to read Stella’s speech.

9 November 2010 During a Westminster Hall debate on consumer credit secured by Stella, David Willetts (representing the Government) agrees to widen the scope of the Department for Business, Innovation and Skills’ consumer credit review to consider the high-cost credit market. Read the debate here. As a result of this concession, the department is flooded by thousands of responses calling for a range of caps to be introduced on the cost of credit.

3 February 2011 The House of Commons debates a motion tabled by Stella, calling on the Government to introduce caps on the cost of credit. The motion is watered down by the Government so they are only obliged to consider introducing caps. Read the debate here. Following this debate, 15 MPs from across the House write to Ed Davey, minister for consumer credit, urging him to commission research into the effects of a total cost of credit cap, and asking for a meeting. The minister takes almost four months to respond, and refuses to arrange a meeting.

3 May 2011 Stella tables an amendment to the Finance Bill calling on the Government to review whether taxation measures could be used to deter high-cost credit providers from causing consumer credit. This begins a two-month process of debate both in the House of Commons and the Finance Public Bill Committee, during which ministers repeatedly acknowledged that the high-cost credit sector is problematic, but reject Opposition MPs’ calls for regulation. On 4 July the Government votes against the amendment, with Labour MPs voting for it. Read Stella’s speech before the vote here.

19 July 2011 The Government succumbs to pressure from the campaign to tackle legal loan sharking and agrees to commission research into the effects of caps on the cost of credit being introduced in the high-cost credit market. This represents a fundamental rethinking of policy by the Government, as a direct result of the work put in by the campaign. Read Stella’s press release on this significant victory here.

7 December 2011 New figures from insolvency experts R3 showed that nearly four million Britons were expecting to need a payday loan to make ends meet in the next six months. 32% of payday loan customers said they had to take out a payday loan to pay off another loan and 48% said the loan made their financial position worse. Huge media attention greets these worrying statistics.

24 February 2012 The Office of Fair Trading announce a review into payday lending, saying ‘we are concerned that some payday lenders are taking advantage of people in financial difficulty’.

1 March 2012 Labour MPs table an amendment to the Financial Services Bill at committee stage, that would give the regulators the power to cap the charges any company can levy for credit to prevent detriment to consumers. The amendment is voted down by Conservative and Liberal Democrat MPs.



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