GLASGOW, Scotland (12/29/11)--A Scottish Labor Party leader said an increase in credit unions would help consumers manage their debt and avoid payday loans.
Credit unions do "amazing work," said Johann Lamont, noting that they offer a lifeline to people who are ignored by the traditional banking sector, provide stability at a time of uncertainty and offer people "a fair deal" (The Press Association Dec. 26).
In addition to an increase in credit unions, Lamont said Scotland needs a change of attitude in how the poorest in society can borrow money. Some families are running into debt on payday loans with large interest payments of up to 2,000%. Scotland's government estimated that 85,000 people in the country annually borrow from more than 150 illegal money lenders, the article said.
Lamont noted that many families see payday lenders as the only option to get through the holidays. She said she favored laws to cap interest rates on loans by payday lenders, and noted that credit unions in her constituency help people to borrow fairly.