Manchester City Council has passed a motion condemning ‘legal loan sharks’ and promoting credit unions. It was proposed, seconded and supported by Labour / Co-operative Councillors, members of this branch. Although this doesn't change anything it does give support to the End Legal Loansharking campaign. It's a serious issue for people with a poor credit rating who have to pay interest rates of 2,000 percent and consequently get deeper in debt. Essentially the poorest have to pay the most for credit. It is not just cash loans it is easy-term catalogue shopping, or forced to use meter cards for electricity & gas. But that is an another issue, part of the bigger picture of no credit rating then you pay over the odds. Definately a need for further development of credit unions.
Notes and welcomes the UK-wide campaign to end ‘legal loan sharking’.
Believes that the lack of access to affordable credit is socially and economically damaging. Unaffordable credit is causing a myriad of unwanted effects such as poorer diets, colder homes, rent, council tax and utility arrears, depression (which impacts on job seeking behaviour) and poor health.
Further notes that unaffordable credit is extracting wealth from the most deprived communities.
Believes it is the responsibility of all levels of government to try to ensure affordable credit for all, and therefore pledges to use best practice to promote financial literacy and affordable lending. This will help to ensure that wealth stays in the local economy. We also pledge to promote credit unions in
Manchester, community based organisations offering access to affordable credit and promoting saving.
Calls on the government to introduce caps on the total lending rates that can be charged for providing credit.
Calls on the government to give local authorities the power to veto licences for high street credit agencies where they could have negative economic or social impacts on communities.
Signed: Councillors Sue Murphy (proposer), Kevin Peel (seconder), J Battle, N Murphy,
Passed 12th October 2011.