By Ryan Carter and Cllr Georgie Laming.
Southampton Sharkstoppers campaign started with a listening action
Our campaign began on the doorstep, hearing stories about the way in in which the current economic climate was affecting people in Southampton. Many had begun turning to payday lenders in their hours of need. These organisations, which attract people with glossy advertising, had infiltrated our communities, especially Shirley High Street in the west of the city. One pay day lender had even moved into a shop that was previously held by the local credit union!
Southampton Sharkstoppers started off as a small group of local activists who wanted to see some real change in Southampton. We were all sick of the payday lenders that are filling up our high streets, and wanted to campaign for fairer forms of credit to become more available. Now, by working with Movement for Change, the local Labour party, Co-op party and interested community groups, we have achieved two innovative wins that will enable us to take on the short term, high cost lending industry in our city.
We began by becoming experts in the availability of credit in Southampton. First we conducted online research; what was available and for how much. We then went out and did mystery shopping of pay day lenders, pawn shops and the mainstream banks on Shirley High Street.
Role playing different scenarios in each store, we built up a first-hand understanding of how easy it is to get credit, and were surprised by our findings. Preaching responsibility, nice workers in the local pay day lenders told our ‘pensioners in hard times’ team to use the bank and not to use them, and our ‘student’ team were rejected for a pay day loan to cover rent on the basis they only had a zero hours contract. We also realised the banks are not trying to compete with the pay day lenders, generally offering only much larger loans. Unsurprisingly however, many of our belongings, jewellery, phones etc, would be taken off our hands for next to nothing by the pawn shops.
We discussed our findings, and began to see that the issue at the heart of our campaign was accessible of fair credit generally, and not just the evil practices of these sharks. A lack of access since 2008, with the contraction of bank lending, seems to have driven the explosion of pay day lenders in our communities. We then built a strategy for taking the campaign forward.
We were pragmatic and realised our power was not yet great enough to be recognised by the huge centralised main stream banks. Without recognition we would not be able to enter into negotiation to make a campaign ask. Because of this we decided to focus on the local credit union; Solent Credit Union. How could we get this small institution, which matched our own cooperative principles, to begin providing more credit to those targeted by the pay day lenders and rejected by the mainstream banks?
Before approaching the credit union we needed leverage. To get this we made an ask of Southampton City Council. Would they introduce a new system of auto-payroll deductions for credit union contributions? They agreed, meaning that all staff would easily be able to put money into a credit union of their choice.
Campaigning in Southampton has paid off: negotiations resulted in an innovative deal with the local Credit Union
We then made contact with Solent Credit Union. With the knowledge of our successful ask of the City Council they agreed to meet for a negotiation about how they lend and who to. We knew the credit union needed more high value borrowers and savers before they could begin competing against the payday loans, and we knew we had just opened up the potential for new high value savers from the Council. But we also knew we could not just walk in there and demand that they make more loans available to people on low incomes.
In the negotiation the credit union sat and listened to the story of our campaign, and then we heard about their business plans, lending criteria and membership. We took five minutes out to caucus, developing a specific ask based on our ability to organise in the future and their self-interest as a business.
In the following negotiation it was agreed that for every two savers recruited through our campaign, they would make available one loan to someone on a low income at risk of going to a pay day lender. Two for one. Of course they will not (and should not) jeopardise their safe lending criteria. Only people who are, based on their assessments, able to pay back the loan will be provided with credit.
This agreement is a huge achievement but it is also a challenge. It means we can help the local credit union to grow, while at the same time making it more possible for those on the low incomes in this city to borrow money in a safe and responsible way. But we are also challenging ourselves and the labour movement in Southampton to organise their money, to join the credit union, and to make a difference locally. It is only by organising our money that we will have the power necessary to take on the pay day lending industry.
