A senior Haringey politician has said credit unions are the best way to prevent “ruthless loan sharks” spreading “misery”.
Writing on the Co-operative Party website, Labour councillor and cabinet member for finance Joe Goldberg said: “Credit unions restore the trust needed for financial services to work. They are often more accessible to people because they are based on a “common bond” – usually a community-based membership.
“Because lenders and savers are all members and owners of the institution, it also encourages fewer people to default since they are not depriving a faceless institution, but their own neighbours of resources when they don’t fulfil their obligations.
“It is easy to say credit Unions and co-operatives work because they put people before profit, but this feels a little simplistic. They work because they address the perverse incentives created by the rules of the casino capitalism.”
The councillor said that Hornsey was on the “frontline” of the legal loanshark industry, adding: “The industry is not only crowding out the high street, but for the online players like Wonga, the speed of access is making their quadruple-digit interest rated loans all too quickly available.
“For the individual desperate to get their hands on immediate cash to relieve the immediate pressure of the day, it can be too easy. They are creating misery for hundreds of families, based on a message that is deceitful and dishonest.”