MPs Want Tougher Regulation of Payday Loans

MPs announced that in their view Office of Fair Trading does not do enough in order to protect consumers from unscrupulous payday loan companies, which do not have proper loan agreements.

According to the chairperson of the Public Accounts Committee due to the wrong policy of OFT borrowers lose £450m a year.

In her words, the regulator had to use more often its powers to revoke the credit licenses of misbehaving lenders.

She said: “It passively waits for complaints from consumers before acting.”

And added that none of the 72,000 firms currently in the market had ever been fined.

In the cases in which the license of a certain director( who is supposed to have a directors service contract) had been withdrawn the same person does not stop their business but just starts it up under a different name.

The OFT said there were tight constraints that stopped them to a certain extent but they were doing their best in order to cope with the situation.

A spokesman said: “In the last financial year alone the OFT has revoked the licences of some of the UK’s largest credit brokers and debt management firms, and taken formal action in more than 85 other cases.”

As the Financial Conduct Authority will receive the regulatory duties next year the committee decided to give some suggestions which in their view would be helpful for the future.

One of the proposals said that not only the annual percentage rate had to be displayed but also the total amount repayable on a loan. Another of the proposed changes was related to the number of times short-term loans could be “rolled over” by lenders.

 

 

Who has the right to vote the England-only laws?

Due to a recent report the majority of MPs representing English constituencies should back Legislation that affects England only.

The McKay Commission was launched in order to take a decision if Welsh, Scottish and Northern Irish MPs have the right to vote on English-only matters.

The words of the government about the report mentioned were that it needed to be seriously considered.

As Scottish and Welsh MPs supported the English government in 2004, it was allowed to push through the introduction of university top-up fees.

However, the current situation was announced to be “unsustainable” so serious changes had to be made.

The proposal of the McKay Commission was that the MPs of different districts had to take decisions only about their regions, which proposal is not only for England but also for Wales.

MPs would be given specific Parliamentary time to debate either to endorse or reject the plans for England.

The commission gave the idea that the proportion of English MPs who have supported a Bill would be published together with the final results.

“If a government was seen to have failed to attract the support of a majority of MPs from England [or England and Wales] for business affecting those interests, it would be likely to sustain severe political damage,” it says.

The opinion of the commission chairman Sir William McKay was that Westminster law-making had to focus on England and Wales as soon as possible.

He added that according to surveys people in England were not satisfied of the existing arrangements and supported change.

“There is a feeling that England is at a disadvantage, and that it’s not right that MPs representing the devolved nations should be able to vote on matters affecting England.”

In a statement the cabinet Office spokesman said they would first have to think carefully before announcing the final decision.

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