AN ELLESMERE Port councillor has urged Cheshire West and Chester Council to press the Government to limit the high interest rates charged by short-term loan companies.
The authority will consider a motion from St Paul’s councillor Ben Powell and fellow Labour member Julia Tickridge tomorrow (December 15).
The motion calls on members to give councils the power to veto licences to high street credit agencies ‘where they could have a negative economic or social impact’.
It also urges members to support a call to the Government to cap the total lending rates that can be charged for providing credit.
Cllr Powell said: “Whilst the companies concerned may say they are providing a valuable service, it is a sad fact that many of the people who take advantage of the loans are borrowing to pay off existing debt.
“All too often they are entering a vicious circle of debt from which there is no escape. This has a devastating effect on many aspects on their quality of life – and, unfortunately, that of their children.
“Christmas is the time when many people who need money – particularly those with children – are at their most vulnerable and consequently fall victims to the temptation of quick cash.”
Annual interest rates quoted on short term loans offered by legal companies can range from 1,000% to more than 4,000%.
Illegal loan sharks – operating on a doorstep basis without a consumer credit licence – have also been ‘trading’ on some of the borough’s housing estates.
The motion urges the council ‘to accept that it is the responsibility of all levels of government to try to ensure affordable credit for all, and therefore pledge to use best practice to promote financial literacy and affordable lending’.
