Payday financing into the UK: the legislation of the necessary evil?

Payday financing into the UK: the legislation of the necessary evil?

KAREN ROWLINGSON

* School of Social Policy, University of Birmingham, Edgbaston, Birmingham, B15 2TT, e-mail: ku.ca.mahb@nosgnilwoR.K

LINDSEY APPLEYARD

** Centre for company in Society, Coventry University, Priory Street, Coventry, CV1 5FB, e-mail: ku.ca.yrtnevoc@3111ca

JODI GARDNER

*** Corpus Christi university, Merton Street, Oxford, OX1 4JF, e-mail: ku.ca.xo.ccc@rendrag.idoj

Abstract

Concern concerning the increasing usage of payday financing led the united kingdom’s Financial Conduct Authority to introduce landmark reforms in 2014/15. This paper presents a more nuanced picture based on a theoretically-informed analysis of the growth and nature of payday lending combined with original and rigorous qualitative interviews with customers while these reforms have generally been welcomed as a way of curbing ‘extortionate’ and ‘predatory’ lending. We argue that payday financing is continuing to grow as a consequence of three major and inter-related styles: growing earnings insecurity for folks in both and away from work; cuts in state welfare supply; and financialisation that is increasing. Current reforms of payday financing do nothing to tackle these causes. Our research additionally makes a significant share to debates concerning the ‘everyday life’ of financialisation by centering on the ‘lived experience’ of borrowers. We reveal that, contrary to the rather simplistic image presented by the news and several campaigners, different areas of payday financing are now welcomed by clients, because of the circumstances they have been in. Tighter regulation may consequently have negative consequences for some. More generally speaking, we argue that the regul(aris)ation of payday financing reinforces the change into the part associated with state from provider/redistributor to regulator/enabler.

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