Hard-up families could soon get council help to escape the grasp of payday loan firms.
Preston is working to set up a credit union which will offer a cheaper alternative to the sky-high interest rates of quick-fix money lenders.
The city’s ruling Labour group is in talks with the Blackpool, Fylde and Wyre Credit Union about extending its services to the city.
And the authority has also blocked access to payday loan firms on all its computers, including those used by the public at the Harris Library.
“This is something that is definitely necessary in Preston,” said Coun Matthew Brown. “The rise in payday lenders, pawnbrokers and the like shows that more and more people are getting desperate.”
Payday loans offer short-term cash assistance, but at exorbitant interest rates ranging from 1,362 per cent APR to 5,853 per cent. A £400 loan can cost as much as £527 to repay after just a month.
Credit Unions are non-profit services owned by their own members. Those members pool their savings to provide cash for loans at interest rates of between 12.7 and 26.8 per cent.
Blackpool, Fylde and Wyre Credit Union was set up in February 2009 and now has around 3,000 members on the Fylde Coast.
Coun Brown explained: “We are committed to bringing Blackpool, Fylde and Wyre to Preston and they are committed to expanding over here.
“Hopefully in the next few months it will be operating here in the city.
“We would have liked to have done it quicker and we are sorry it has taken longer than we would have liked.
“The thing about credit unions is they need as many people as possible to join for them to be successful.
“Setting up a credit union in Preston was one of our key policies in our election manifesto. But we have got to make sure we get it right.
“We will be engaging with trad unions, churches and the voluntary sector to make sure this is as successful as it possibly can be. We have barred access to these payday loan companies from all council computers, including those the public use at the Harris. We want to do all we can to make sure people have an alternative they can afford.”