Bishop of Birmingham supports faster implementation of payday lending regulation

On 9th December 2013, the Bishop of Birmingham spoke in favour of a number of amendments to the Financial Services (Banking Reform) Bill, during its Third Reading. The amendments related to new powers being given to the financial regulator to regulate the payday loan industry. There was also a division on one of the amendments debated – more information can be found here.

01.04.14 Bishop of BirminghamThe Lord Bishop of Birmingham: My Lords, I take a moment to thank the noble Lord, Lord Lawson, for his kind remarks about my friend the most reverend Primate’s speech last Thursday. I shall pass that on to him. He regrets that he is not in his place today. He is presiding over a whole number of bishops—it amounts to about the number of noble Lords in your Lordships’ House tonight—up in York.

I support these amendments, particularly Amendment 22 on the timetable. I am grateful for the Government’s approach and seriousness towards this payday lending crisis. The examples we have heard from noble Lords about the experience of poverty are gruesome. I should like to introduce a new element of competition to the response time for this particular bit of industry in terms of its timetable, because the risk, referred to by the noble Lord, Lord Newby, to the industry itself in not getting it right is paralleled by the risk just mentioned by the noble Lord, Lord Mitchell, of people having yet another Christmas borrowing at too great a cost and risk to their own future and that of their family. The Minister is trying to set a final deadline of January but I ask that he really encourage the industry to bring this forward to 1 October.

We have heard about the industry’s complexities and the credit unions that are needed. We have also heard of the encouragement this would give to those who are working very hard to provide effective money advice to those who are managing unmanageable debt and to help young people who have been mentioned start handling their money properly. Local charities, churches and the faith groups are responding to the Government’s approach to tackling this global financial crisis. However, the slow timetable—several years before all this is implemented—is a completely different timetable from that of someone who has no resources, who has no back-up and who is looking for food tomorrow. I encourage people to support this amendment.

Lord Newby: …The noble Lords, Lord Mitchell and Lord Eatwell, and the right reverend Prelate the Bishop of Birmingham, urged the FCA to go quicker. The FCA will go as quickly as it can. Our amendment requires it to have the new system in place no later than the beginning of January. If it proves possible to do it do it earlier, certainly if it were possible to do it before Christmas, I know that the FCA will do so, and will use its best endeavours to bring forward these proposals as quickly as possible. Certainly, if we are going to include within the system features such as a real-time database, I am afraid that this cannot be done very quickly. Everybody has seen the success and failure both of Governments and other organisations to introduce IT systems very quickly. The thought that one can do this within a matter of weeks prior to consultation, possibly with no consultation, seems to me totally fanciful…