Scotland Shows Problems – and Potential Solutions -to Controlling Pay Day Loans through Planning System

New Scottish consultation – no issues with proposal with removing betting shops from fin and prof services.  Interesting as Lab is proposing this for England.

On Pay Day loans

 Selling pay day loans is not specifically mentioned in the UCO. The term PDL refers to offering loans on particular terms rather than something that would necessarily be recognised as a “use” in planning terms.

The Financial Conduct Authority’s definition states a pay day lender
offers high cost short term credit where:
• APR is equal to or higher than 100%
• Credit is provided for any period up to 12 months
• Credit is not secured by a mortgage, charge or pledge
PDL can be offered from a variety of premises, ones which might specialise in such lending or others which offer it as part of a range of products or services, such as pawn broking, cheque cashing, money transfers, foreign exchange and/or other financial services or a combination of these.

In many cases, therefore, PDL may form only a limited aspect of the range of financial services offered from the premises and may be a part, perhaps only a very small part, of the overall use of the premises.

Another challenge in applying planning controls to premises engaging in PDL is that, despite definitions provided by the likes of the FCA, it is not straightforward to identify a suitable definition of PDL for the purposes of the UCO. Any definition would require to be sufficiently broad to catch the wide range of potential activities that should be included, otherwise slight changes in loan terms might avoid controls. At the same time, it should not be so broad as to capture a much wider range of activities unnecessarily.

They propose two potential solutions.  Firstly excluding from F&PS certain activities, such as pawn shops and loans to non depositors.  Secondly confing F&PS to banks, insurence etc.  a list of accepted solutions.

This is cleaver however it accepts in few cases pp would be required as loans to deposit takers would not be the primary purpose.  I suggest a solution. Use the defined uses including deposit takers approach and exclude a new UCO clause ANY use including ‘lending to non deposit takers’ whether or not it was a primary purpose or not.


One thought on “Scotland Shows Problems – and Potential Solutions -to Controlling Pay Day Loans through Planning System

  1. Pingback: Government Adopts Scottish Definition of ‘Pay Day Loan Shop’ (almost) | Decisions, Decisions, Decisions

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