Birmingham is sending a clear message in a fight against payday loan companies and other high cost lenders by publishes its Fair Money Manifesto. The manifesto sets out a clear commitment to help people to tackle unaffordable debt and to ensure that Birmingham residents are able to access fairly priced and ethical financial services.
The Fair Money Manifesto sets out four key commitments:
- To call for better regulation of high cost lenders
- To support the expansion of credit unions and responsible lending
- To engage with banks so that they widen their services to residents
- To seek powers that would allow the Council to manage the growth and operation of high cost lenders in neighbourhoods
Download the manifesto here: BCC Fair Money Manifesto
Cllr John Cotton, Cabinet Member for Social Cohesion and Equalities, has been leading the development of the Fair Money Manifesto while working with partners on the Birmingham Fair Money campaign.
He said: “We know that rising prices and pressure on wages is creating a cost of living crisis for many households in the city. Borrowing from payday and other high cost lenders to bridge the gap can seem like a quick solution to the shortfall between income and essential outgoings. But loans at such high cost can be extremely damaging to households, trapping them in a spiral of increased borrowing and making a bad situation much worse.
“There’s a wider impact on communities too. Lenders who are profiting from people’s hardship are taking millions out of our poorest neighbourhoods, sucking money out the areas that can least afford to lose it.
“That’s why we launched the Birmingham Fair Money campaign, in order to give people in our city practical help, support and access to affordable finance. The launch of the Birmingham Fair Money Manifesto is the next step in the battle.
“We support calls for national changes to the regulation of high cost lenders, but crucially this manifesto focuses on what we, and our partners across Birmingham, can do ourselves.
“This manifesto is our pledge to the citizens of Birmingham that we will do all we can – working together with partner agencies – to ensure they have access to fair, affordable, financial services in the city.”
CEO of Citysave Credit Union, one of the organisations involved in Birmingham Fair Money welcomes this Manifesto, Angela Clements, said: “This is a significant step forwards, and I am so proud that Birmingham is leading the way on this agenda in taking a holistic view of making affordable and ethical lending widely available in our city. We have seen a huge growth in personal indebtedness this year, with so many having fallen prey to predatory tactics from high cost lenders, including misleading promotion and sales process with unclear costs that are extraordinarily high.
“Wherever we can help, we naturally are trying to do so, and we are lending more than ever this year. However, we are also seeing a large growth in the numbers of new applications that we have to decline and we are pleased to be working with high quality, free debt advisers and other benevolent organizations who are supporting more and more Birmingham residents.”
Damon Gibbons, CEO of Centre for Responsible Credit, added: “The publication of Birmingham’s Fair Money Manifesto is an extremely positive development and we urge other cities to follow their lead and do the same. Later this year the banks will publish details of their lending at a postcode level basis.
“Our great cities need to use that information to call the banks to account and obtain commitments to scale up credit union and other affordable credit services to meet the needs of low to middle income households. Birmingham will clearly be in the lead and we urge other cities to follow its example. We also welcome Birmingham’s determination to address the misery caused by the expansion of payday and other high cost lending. Government should give Birmingham and other cities the power to stop the proliferation of predatory lenders on our high streets.”