Points on controls over payday loans

Find out potential results for the proposed actions to procure more control over high street.

By Nicole Hamer |

14:15 02 May 2013

Labour party candidate Mr. Miliband has declared that there should be more regulation of short-term loan offices, such as those offering payday loans, which are charging an exorbitant fee.

 

He is calling for more power for local areas so the people can decide whether or not they want multiple payday loans offices on their high streets.

 

What could this mean for payday loans?

 

• Less competition—less competition on the high streets may actually result in increased interest rates by some types of payday loans offices.

 

• Reduced business—requiring payday loans to move off high street and into other obscure places will no doubt affect business and may cause prices to rise as they try to cover the same costs with a dwindling clientele.

 

• Stricter regulations—the upside to this is that payday loans may need to reduce their interest rates which will be a relief to many who have to rely on them.

 

• Improved reputation—with stricter controls and potentially lowered interest rates, payday loans may benefit from an improved reputation and increased business.

 

What could this mean for high street?

 

• More control—local neighbourhoods would have more control to regulate what comes into high street, but limiting payday loans offices could potentially leave unoccupied spots on high street.

 

• More shops—this could pave the way for more shops to appear, and could create healthy competition or increased variety in the types of products and services available.

 

Neighbourhoods may soon be able to voice their opinions regarding the types of shops that can be found on high streets, but hopefully payday loans will still be available in some convenient locations, but with improved rates and competition, alongside being regulated accordingly.