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Church plans for credit unions a welcome alternative to unscupulous payday lenders

26 Gorffennaf 2013

Citizens Advice has responded to the Church of England's plans to compete with payday lenders by supporting credit unions.

Citizens Advice Chief Executive Gillian Guy said:

"The harmful impact of unscrupulous payday lenders is undeniable. We have recently seen a report where a borrower facing staggering debt contemplated suicide. With 87% of payday lenders failing to check if borrowers can afford to repay their loans, payday lenders are trapping people in cycles of never-ending debt – a far cry from their responsibility to treat their customers fairly.

“We know there’s a real need for small, short-term loans. When household budgets are tight, an unexpected expense like a broken washing machine or a burst pipe can mean that people need to borrow a small amount of money at very short notice.

“Credit Unions can be a great option for some people, so it’s good news that the Church of England is planning on boosting them. But at the moment, Credit Union’s can’t meet all the demand for short-term credit. We need a responsible short-term credit market that treats its customers fairly, and we want to see banks stepping up and offering short-term micro loans to their customers to fill this gap in the market.”

Notes to editors:

  1. The Citizens Advice service comprises a network of local bureaux, all of which are independent charities, the Citizens Advice consumer service and national charity Citizens Advice. Together we help people resolve their money, legal and other problems by providing information and advice and by influencing policymakers. For more see the Citizens Advice website.
  2. The advice provided by the Citizens Advice service is free, independent, confidential, and impartial, and available to everyone regardless of race, gender, disability, sexual orientation, religion, age or nationality.
  3. To find your local bureau in England and Wales, visit citizensadvice.org.uk. You can also get advice online at adviceguide.org.uk
  4. You can get consumer advice from the Citizens Advice consumer service on 03454 04 05 06 or 03454 04 05 05 for Welsh language speakers
  5. Citizens Advice Bureaux in England and Wales advised 2.3 million clients on 5.4 million problems from October 2013 to September 2014. For full 2013/2014  service statistics see our quarterly publication Advice trends
  6. Citizens Advice service staff are supported by more than 21,000 trained volunteers, working at over 3,000 service outlets across England and Wales.