Dave was back on TV a few days ago. I watched the programme because I think Dave has identified more than a few points, which could well be important in the greater scheme of things.
Not content with starting a bank, which is a local bank for local people, that provides loans and general banking services Dave is looking at other financial “products”. It looks as if Dave’s Bank is being very successful and it harks back to a time when there were a lot of local savings banks etc. which were more personal and much, much, much less corporate and distant than they are now.
My first real job in the mid to late 1970s was working for a bank. I joined at 18 and did all the usual stuff that new recruits did which was serving the public at the counter and doing various admin jobs. After I’d been there for a while I noticed that the banks customers were probably not taking as much benefits from their banking activities than they could do. I didn’t mention it to anyone but it was apparent that the customers were, for the most part being kept in the dark about what benefits they could get, some of which would be financially beneficial.
Banks services have deteriorated over time and they are now at a pretty low ebb. We are all suffering for the mess the banks made. It wasn’t the fault of the vast majority of the staff; it was of course the more senior managers and their roulette game staff.
Dave has been doing pretty well providing loans for local people and businesses and in due course he has become aware of the activities of the pay day loan companies who have sprung up everywhere. You’ll have seen the ads and the ridiculous interest rates some of which are over 2000%.
It turns out that a lot of these loan companies are owned by very large USA financial organisations. Dave tried to get to meet some of the people running the pay day loan companies and found that he couldn’t. The addresses they provided were forwarding addresses and everything they did was on-line so no chance of speaking to an actual human then.
Some of the pay day loans that some people in his area and beyond had taken out, hadn’t gone well. They had borrowed a small amount, which became a very, very, very big amount. In fact as we all realise that’s the way these people make their money. They are set up to ensure that people don’t pay the amount they are supposed to and get into default with the huge interest amounts making things very serious in a very short time.
It’s very obvious that some of these pay day loan companies perhaps don’t trade as ethics might require. Of course they should be regulated and it would seem that they are in fact operating outwith current lending regulations as things stand.
The Government and the Financial Conduct Authority (FCA) are doing something about it but it is happening very slowly. In the meantime peoples lives are being damaged and whilst it’s easy don’t take the loans then it’s not so easy if the people who do are desperate.
Dave set a fund of £25,000 to provide pay day loans to his local community and every penny he lent was repaid. That might not be the case in the future.
His request to those who were borrowing was – “Ill lend you the money and if you don’t pay it back it will mean that I’ll not be able to help someone just like you or your sister/brother/Mum/Dad etc. in the future”.