Payday Lenders are Now Agreed with New Code of Lending Practice

By:  28/11/2012
Keywords: logbook loans

CFA (consumer finance association) has enforced a new code of practice for payday lenders. The code is designed to protect consumers who borrow payday loans but financially vulnerable. Lenders have to stick on the minimum standard outlined in the code. CFA has proposed a deadline for lenders to ensure that they will do the same.

Several things are included to keep lenders within limit that include a limit of rollover of payday loans. It also allows for some extra repayment time to consumers struggling with their financial situation. In this summer, the court has also included that the parts of a charter is also agreed with the government and other parts of economic industry in UK. The new code allows lenders to roll over a loan only maximum of three occasions. Customers surely get minimum 30 days repayment period. It is also mentioned in code that interest will be frozen if borrower is struggling with financial hardship.

The office of fair trading (OFT) has finalized its investigation on payday loan companies and at the same time new code has been issued for lenders. OFT was investigating several payday loan companies through formal way after getting complains about their aggressive debt collection practices. CFA chief executive, Russell Hamblin Boone has stated that bring the code in practice is a significant step to control payday loan industry. It makes the members of payday loan industry responsible and also helpful to end corrupt lending and collection practices.

Executive has further stated that the association will also introduce an independent monitoring framework. It will continue its work with regulator, government and consumer group to set high standards. Other lending industry like logbook loans and personal loans should also be aware about their practices. The consumer credit trade association, BCCA and finance and leasing association are also agreed with the new charter.

Keywords: logbook loans



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