Islington Councillors demonstrate against pay-day loans - but drop by-law plan
�Islington Council members who protested against payday moneylenders have been forced to abandon a bid to ban them from the borough.
Council leader Cllr Catherine West, executive member for finance Cllr Richard Greening and other councillors joined two demonstrations outside payday lenders, including The Mall Cheque Agency in Archway Mall, Archway.
The protests were staged by the non-profit Islington Credit Union on Thursday and Saturday, to warn of the dangers of some lenders’ high-interest loans.
But the council’s plan to ban the practice with a by-law – a recommendation of the council’s flagship fairness commission – has been hit by legal problems.
Cllr Andy Hull, chairman of the fairness commission, said: “We explored the possibility of bringing legal action, but we found it was legally impossible. However, we wanted to do something in the spirit of the fairness commission’s recommendations, if not the letter.”
Payday loan companies offer short-term loans designed to tide people over until the end of the month with high annual percentage rates. The Mall Cheque Agency offers 515.1 per cent APR.
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The council wants to raise awareness of the Islington Credit Union in St John’s Way, Archway, as a safer way to borrow.
It is owned and run by its members, who can both save in and borrow from the union.
Martin Groombridge, manager of the Islington Credit Union, said: “The stress of trying to keep up repayments to payday lenders can lead to health problems, cause depression and even lead to family breakdowns through arguments about money.”
The Mall Cheque Agency declined to comment.
Other lenders have said they do not target vulnerable borrowers and warned that residents may go to unregulated loan sharks if they could not get payday loans.