The Consumer Credit Counselling Service chair Lord Wilf Stevenson has pledged to regulate the payday loan sector if it continues to ignore calls for self-regulation.
The Labour peer claimed that amendments would be made to the Financial Services Bill to enable the sector to be regulated over the next year.
Addressing a fringe event at the Liberal Democrat conference in Brighton, Lord Stevenson said: "The amendment calls on the financial authorities to come up with a scheme for regulating high-cost loans, or payday loans, within a year.
"The truth is that the people who earn least in our society have the most need to have access to short-term borrowing such a payday lenders so they can just get through the year", he observed.
Strict credit checks by the majority of standard loan providers have forced many borrowers to seek credit from the controversial, high interest payday loans.
As a result the market has boomed into a billion pound industry over the past couple of years.
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