Payday loans are a hotly debated subject as many people already know. In both the United States and the United Kingdom, it is difficult to reconcile the incredible interest rates that some people are paying with the service that payday lenders are providing. As The Guardian reported recently, the most recent news from the UK is that a charter has demanded lending rules to become stricter in the country. This is on the back of several local moratoriums on payday lending in public locations. It is making life for payday lenders very difficult, but there is a possibility of compromise.
Charter to Stop the Payday Loan Rip-Off
The new UK charter is aptly named the “charter to stop the payday loan rip-off”. It is created by staunch advocates of a payday loan-free country and although this group does not have the power to shut them all down instantaneously, it can sway public opinion. Indeed, public opinion is already in favor of cutting the interest rates that payday lenders are allowed to charge for their services. Most of the time, the interest rates soar above 400% or more which causes more problems for people than benefits.
Even though there are plenty of people that love or need access to quick money, it is not helping them in the long run and is poor for the community as a whole. Impoverished people should be looking for modes of employment rather than using a cheap source of debt to fuel their livelihood. This is one of the main reasons the charter was formed in the United Kingdom in order to get rid of the payday lending companies altogether.
Clout, Power, and Payday Loans
Unfortunately for the charter, there is no way to end the “payday loan rip-off” from the United Kingdom completely. The biggest payday loan companies in the United Kingdom are well-equipped to handle the political hailstorm that seems to be coming. Most of them have done a good job of meeting and befriending the contacts that they need to stay in business. More importantly, many of the largest banks in the world are seeing the profit in payday lending so they have purchased these nationwide companies for themselves.
The legal battle will most likely be a long one as the payday loan industry maintains a tight grip on the power supply while the people’s demands are being ignored. There are millions of people in the country who are crying out to stop the financial abuse of the poorest citizens. Even if they do not have much power, they are large in number and can sway the elections no matter what connections payday lending companies might have.
The battle in the United States is much like the United Kingdom, but it varies from state to state. Some places in the Northeast (such as New York) have been firm with payday lenders recently, but other states have shown no intent to restrict the use of these loans for people who are in need of money. Only time will tell how payday lending in the US and UK turns out. But we are here to help anyone who really needs assistance in getting these loans paid back in a more affordable manner.
