Crunching the credit

One of the key ways that could be used to combat the insiduous effects of credit which the government could use to make life a little easier for people at the sharp end of the current economic crisis is very simple: introduce capped rates.

But as this report shows, the government considered it then quickly discarded it, citing false and unjustified concerns about people being forced to rely on unregulated loansharks. What a joke. What the white shirts in government don't get is that the legal and regulated doorstep and payday lenders are loansharks, some charging interest to the tune of thousands of percent, while proudly waving their consumer credit licenses.

The decision to simply ignore capping, especially without referring to countries where capping has proved to be successful in limiting the excesses of some lenders, is a decision that favours only the scum like the pawn shops and high rate check cashers, the gold scrapers and doorstep voucher men, pond life who profit out those at the bottom end of the income scale.

But capping won't work on it's own. So many people need to be helped out of the clutches of the blood suckers on the fringe finance industry. This is a time when the government needs to show some serious support for finance organisations like credit unions, who in some places are the only experts in finance in disadvantaged communities. Credit unions' provision for lending to small social enterprises and local businesses, a bedrock of the economy, could be expanded to encourage more local entrepreneurs onto a self reliant route to a sustainable economic success.

South Tyneside Credit Union