London group plans loan shark attack

London Citizens ask for interest loan cap

London Citizens demand interest loan cap. Photo: Emily Jupp

A mass meeting of 2000 London community activists has demanded politicians introduce a ceiling on loan interest rates.

The London Citizens group, which began in east London, represents civic, religious, community, student and trade union groups from across the capital. They launched their campaign at the Citizens’ Assembly at the Barbican Centre on Wednesday night.

Community activists representing 150 local civic groups were joined by Mayor of London Boris Johnson, as well as politicians from the three main parties and business and religious leaders.

London Citizens, which successfully campaigned for the London Living Wage (now backed by Boris Johnson), says poor people are being exploited by lenders who charge interest on loans of up to 500 per cent. They want the next government to introduce a 20 per cent cap on interest rates on loans.

The campaign was launched alongside a report from the  New Economics Foundation calling for a fair lending law. The report says three million poor UK households pay hundreds of thousands of pounds in interest to “legal loan sharks.” In addition to an interest rate cap the report calls for new laws to oblige banks to make normal borrowing available to the less well-off.

The campaign was endorsed by a multi-faith group of religious leaders who spoke about their moral and ethical objections to “usary,” or excessive interest on lending.

Father Tom O’Brien from Our Lady’s Catholic church in Bethnal Green, Tower Hamlets, told East London Lines he was backing the campaign because his congregation comes from some of the poorest communities in the capital. He said capping interest rates would not stop poor people accessing credit but would protect them from “legal loan sharks that exist in our society.”

He said: “This NEF report shows that a cap on interest rates along with more micro-financing to provide lending to the poor would protect people from debt.”

Launching the campaign, Dr Maurice Glasman, a Jewish community activist and lecturer at London Metropolitan University in Tower Hamlets, spoke about the inequality of poor people suffering in debt whilst banks receive billions of pounds in bail-outs from taxpayers.

“This bail-out has been the biggest transfer of wealth from the poor to the rich since William the Conquer confiscated the common land of the country,” he said. “There must be a limit to how far we can accept the rich living off the poor.”

The assembly also called for an expansion of local credit unions, a financial literacy programme for schools, and a statutory code of responsible lending. They further recommended the expansion of the living wage – a basic family minimum which London Citizens says is the best insurance against debt.

The demands were drawn up by community groups at meetings across London, and agreed upon democratically.

The assembly heard testimonies from people suffering financially from the effects of the recession who back London Citizens’ campaign.

London Citizens began as The East London Community Organisation (TELCO) in 1996 and expanded to include chapters in south and west London.

Organisations represented include: Grove Medical Centre, Lewisham; The East London Mosque, Tower Hamlets Unison trade union; The Nigerian Catholic School, Hackney; The London Buddhist Centre, Tower Hamlets; and St Andrew’s and St Mary’s churches in Croydon.

Leave a Reply