tag:blogger.com,1999:blog-22057922.post4033027304389024729..comments2023-10-30T14:03:37.394+00:00Comments on Lindylooz Muze: The Sharks are circling - but is it the Lib Dems they will ultimately devour?Linda Jackhttp://www.blogger.com/profile/05155438246679688058noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-22057922.post-56825130490871264662011-02-03T09:11:39.970+00:002011-02-03T09:11:39.970+00:00Cost-of-credit capping could be applied to high st...Cost-of-credit capping could be applied to high street overdrafts in my view - ie, where an institution takes unreasonable profit because you can't readily switch your current account provider.<br /><br />The real sin in high cost credit is churning customers so they end up with balances they can only just about pay - but which mean years of indenture (almost) to the loan company.Andrew_F_Smithhttps://www.blogger.com/profile/15919004987612131649noreply@blogger.comtag:blogger.com,1999:blog-22057922.post-37629409450731096822011-02-03T00:48:40.062+00:002011-02-03T00:48:40.062+00:00Well said Andrew. Linda was clearly not listening...Well said Andrew. Linda was clearly not listening to what Martin Lewis was saying at the launch event as he has clearly said that capping APR is inappropriate for 'payday loans'.<br /><br />More here: http://blog.moneysavingexpert.com/2011/01/28/dont-tell-mps-im-against-payday-loan-regulation/Dan Falchikovhttps://www.blogger.com/profile/10202541499332901648noreply@blogger.comtag:blogger.com,1999:blog-22057922.post-17241764020329447612011-02-02T14:55:15.320+00:002011-02-02T14:55:15.320+00:00Capping interest rates is a really bad plan - in m...Capping interest rates is a really bad plan - in my opinion it will be very counterproductive and mean that many who need access to credit for essential expenditure won't get it. <br /><br />Lib Dem intentions regarding irresponsible lending are, in my view, likely to be much more successful in achieving social aims of access to affordable credit than Stella Creasy's motion to cap rates.<br /><br />The last government thought it would lick the problem of high cost credit by encouraging the friendly societies to lend to the financially excluded (or funts - financial untouchables, a term I helped coin: These are people the main stream banks don't wish to have any experience of dealing with). The friendly societies. apparently, turned round and pointed out that, in view of the risk, they'd have to charge pretty much the same APR as the existing high cost lenders.<br /><br />So cap the rate and you cut off supply to high risk groups. They won't be able to replace their dishwashers or get the banger they need to get to work fit to pass it's MoT. Great.<br /><br />Then, is high cost credit actually that high cost? Used as intended, to tide you over at a critical time when you have a critical need, pay-day loans cost about as much as saying to your mate "lend me a tenner and I'll buy you a pint at the end of the month". They are tough - but not unreasonable.<br /><br />Used as unintended, as rolling, renewed credit to finance an unsustainable lifestyle, they are usurious. But having a statutory duty to lend responsibly - Lib Dem policy - could end this: I'd suggest a maximum number of short term loans (three?) in a given period (a year?) and only two to be able to run concurrently. Oh - and tough rules on selling. Longer term high interest loans? A maximum net-income to advance ratio and a maximum loan period maybe?<br /><br />And, whatever happened to the bank manage who used to ask you what you wanted the money for (Nat West financed my first suit on a personal loan - but only cos my Dad had been a customer for thirty years and i could say I needed a suit or I wouldn't be able to start work with my first employer). Loans for frivolous purposes could be restricted and evidence of use of the money required.<br /><br />Of course, we could get rif of high cost credit all together and ensure the funt gets what he or she needs to deal with a money crisis and not pay through the nose.<br /><br />The banks we own are making money hand over fist again: why not make them put 0.5% of their profits into social lending? In the case of Barclay's alone (OK - that's the one we don't own - but I don't see why they should be exempt), that would be £58 million - or 116,000 advances of £500.Andrew_F_Smithhttps://www.blogger.com/profile/15919004987612131649noreply@blogger.comtag:blogger.com,1999:blog-22057922.post-56547965612002614022011-02-02T13:27:12.128+00:002011-02-02T13:27:12.128+00:00I couldn't agree more. Being against usury is ...I couldn't agree more. Being against usury is about as liberal as a principle gets...Andrew Hickeyhttps://www.blogger.com/profile/07412263807838661843noreply@blogger.com