Global Coalition for Responsible Credit calls on G20 leaders to create a financial system ‘worth saving’
Debt on our Doorstep, with support in the UK from the trade unions UNITE and PCS, the New Economics Foundation, Church Action on Poverty, the National Housing Federation, and former Cabinet Minister and Chair of the Labour Party Ian McCartney M.P, and with the support of a Global Coalition for Responsible Credit comprising the European Coalition for Responsible Credit, the U.S National Community Reinvestment Coalition, and partners in twenty other countries, today issued a call for the forthcoming meeting of the G20 to commit itself to the creation of a financial system that is worth saving by:
Agreeing to place financial services providers under a ‘duty to exercise responsibility in financial services’. Financial services providers need to be required to sign up to clear principles of responsibility and to have transparent mechanisms in place to ensure that these principles guide their behaviour in practice. Remuneration policies need to be reassessed in the light of this ambition. The responsibility should include a requirement for financial services providers to properly consider the needs of all households, including those on low incomes, when designing financial products
Ensuring taxpayer investment in the banking system is turned into real help for people in financial difficulties, by agreeing actions to force lenders to offer to reschedule the liabilities of households in debt over the long term at affordable rates
Committing to take further action to stop home repossessions and ensure lenders offer affordable mortgages to people in negative equity and/or mortgage arrears, and to work to stabilise housing costs in the longer term by increasing the supply of affordable housing.
Chair of Debt on our Doorstep, Damon Gibbons, commented:
“Financial services providers have engaged in irresponsible and usurious lending, causing households to become increasingly vulnerable to economic shocks and saddling them with unsustainable levels of debt. We call on the G20 to signal a decisive break with the short termism, greed, and irresponsibility that have caused the current crisis and to take action to ensure that taxpayer investment in the banking system is now used to create a system that benefits people.”
Supporting the work of the Global Coalition, Andy Case, a National Secretary for Unite, the UK’s largest trade union with 2 million members, including 178,000 working in the Finance Sector, said:
The current situation provides an opportunity to re-build a financial system that supports a long-term outlook and is consistent with democratic aims, financial stability and social justice."
Udo Reifner, Chair of ECRC:
"There is more than rescuing banks from bankruptcy in this actual crisis. There is a need to go to the origins of this crisis in bad credit all over the world. But stakeholders of the financial system still wait for considerable efforts to shelter people from usury and irresponsible lending practices. The actual implementation of the EU-Directive on consumer credit from 2008 in all European member states is an alarming example. It still reflects the views of 2005 when deregulation and consumer information were seen as the best safeguard against bad credit. In the meantime in states like Portugal, Germany and the UK measures to cope with high risk lending practices, flipping and churning in credit card credit, misuse of homes to finance outstanding debt, exclusion from basic banking services are discussed. G20 should carefully consider also these measures and respond to the concern of people all over the world expressed in the present declaration as well as in the seven principles of responsible credit this coalition has already put forward years ago."