payday loans

Toronto will no longer issue licences to payday loan outlets

Among the many items adopted at this week's city council meeting — the first of its kind since summer break — was one regulatory change to protect Toronto's low-income residents. 

After debating a committee report, council voted unanimously to stop issuing licences to new payday loan outlets in Toronto. 

According to the report, there are currently 187 payday loan outlets in Toronto. 

City councillors such as Josh Matlow and Kristyn Wong-Tam pointed out the "predatory" nature of these outlets, saying they often put people in inescapable situations of debt, according to the CBC

Wong-Tam said low-income residents are targeted by these outlets and charged "exorbitant" fees they often can't pay back. 

Other recommendations that passed on the subject include asking the province to limit annual interest rates for payday loans to 30 per cent or less, and banning payday loan establishments from advertising on city property. 

They also voted to request the federal government cap all loan fees at $15 on every $100 and lower the maximum interest rate from 60 to 30 per cent by amending the Criminal Code. 

And while many think the change is a step in the right direction, others are saying these outlets can sometimes be vulnerable residents' only option. 

As the report points out, "consumers typically access payday loans for emergency situations and for necessary expenses such as car repairs, rent or utility bills."

So, many are saying deeper changes need to be made so residents have somewhere else to turn. 

"Social assistance rates and the minimum wage need to be increased so that people don't go to these lenders in the first place," Kalin Dokis wrote on Twitter

"OK, that fixes a part of the problem, but not existing outlets, nor does it address the issue of people needing to go to them. Will this not result in a rise in loan sharks to fill market demand?," JMJimmy tweeted

And while many are saying the change is a good start, Toronto residents evidently believe there is more to be done. 

City council was able to make this change because of provincial regulations brought in last winter that allow municipalities to create their own rules surrounding the number of payday loan outlets. 

Hamilton was the first city to implement bylaws to restrict and minimize the number of them back in January.

"We heard over and over and over again stories of how people's lives were ruined, leading to depression, broken families, even suicide, because they were victims of these predatory, parasitical payday lenders," Matlow said during the debate. 

"People can never escape the vicious cycle they get into because they can never get out of having to pay off these debts."

Lead photo by

Cash Mart

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