Credit union campaign set to break the hold of loan sharks
Trade union Unison launched a nationwide network of credit unions today to loosen the iron grip of payday loan companies on impoverished members.
The public-sector union has signed up with 40 credit unions in areas across most of Britain to address the soaring number of members seeking help with financial difficulties.
Members referred to a credit union will be able to take out low-interest loans that can be recuperated through payroll deductions.
Unison general secretary Dave Prentis said: "The credit union network is a practical solution to help members drowning in debt.
"Banks are turning their backs on low-paid workers pushing them into the arms of unscrupulous payday lenders.
"That is why we are setting up this network of credit unions with the aim of providing a safety net for members."
The initiative comes hot on the heels of a survey of low-paid Unison members which showed that one in five had been turned down by their bank for a loan or overdraft.
This has led to desperate workers seeking payday loans that burden them with colossal debts at high interest, the union warned.
Unison hopes to be working with over 100 credit unions before long.
The union has also called on Labour to include its "support and endorsement" for credit unions in its next election manifesto and will seek to make it part of TUC policy at next year's congress.
Mr Prentis added: "We want to drive sky-high interest rates off the high street with a cap on the amount of interest that lenders are allowed to charge."
He stressed that the union will urge "whichever party is in power after the next general election" to take on the payday loan industry by restricting advertisements and capping the interest they charge.
And he said greater work with credit unions will undercut the need to legislate against payday lenders.
London Capital credit union's Martin Groombride, one of the 40 signed up with Unison, added: "I'm with the the Archbishop of Canterbury on this one - I want to take payday loan companies out of business."