Christian financial advisors urge stronger controls on 'payday loan sharks'

The Association of Christian Financial Advisers is welcoming new government measures to control high-interest Payday loans. But ACFA says regulation must go further. ACFA is calling for a maximum interest rate and a ban on rollover credit to protect the poor and vulnerable from exploitation.

The Office of Fair Trading announced yesterday that high interest rate lenders are to face advertising curbs and come under greater supervision, following evidence of 'widespread irresponsible trading.'

"This is a good start," said ACFA spokesman Aidan Vaughan, "but action against high-interest loans must not stop there." He added: "ACFA is calling for a maximum interest rate; a ban on 'rollover' lending from month to month; interest rate comparisons with other forms of 'normal' debt; the affordability of repayments to be discussed, and for the whole
lending process to be documented.

"The Office of Fair Trading and the new Financial Conduct Authority should set up codes of good practice, including guideline interest rates, which should then be clearly displayed on any advertising, to stop the manipulation and exploitation of low-income households.

"The rapid increase of 'money shops' in our high-streets is a worrying trend as the effects of recession and stagnant growth erode the limited savings of vulnerable groups.

"While the story may be less appealing than those of bankers' bonuses and the LIBOR rate abuse, this is really of much more importance to ordinary people," said Aidan Vaughan.

ACFA is the UK network of Christian financial advisers and related professionals. It aims to be the voice of Christian financial advice and champions best practice in the UK. The ACFA website offers links to Christian financial advisers across the UK: www.christianfinancialadvisers.org.uk