LONDON (2/3/14)--A new report from a London assembly member urges the city's mayor to promote credit union membership as a way of stifling payday lenders.
"Payday London," a report from Liberal Democrat London assembly member Stephen Knight, recommends London Mayor Boris Johnson curtail illegal and payday by actively supporting the growth of credit unions with low and capped interest rates.
The report calls on Johnson to open a credit union savings account for every new secondary school student and for Johnson to actively encourage London residents to join a credit union. The report recommends that Johnson ensures that regulations are changed to require specific planning permission for payday loan shops.
"It is a harsh fact that where credit exclusion is greatest, payday companies and illegal loan sharks thrive," Knight told the 24dash.com. "Borrowing is a reality of life for many people on a low income, but if people have no access to credit at low interest rates they are often driven into the hands of loan sharks."
London residents have less access to credit unions than other U.K. residents, Knight said. About 1% of London residents belong to a credit union, compared with 3% in Merseyside and 5% in Glasgow, he said.