Toronto will no longer issue licences to payday loan outlets
After debating a committee report, council voted unanimously to stop issuing licences to new payday loan outlets in Toronto.
Council votes 20-0 to approve package of new regulations for payday loan stores. City will immediately stop issuing new licenses to payday loan establishments. pic.twitter.com/VbIT2m30aZ— Matt Elliott (@GraphicMatt) October 2, 2019
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.
Council is debating a committee report recommending they stop licensing new payday loan stores. Perruzza has moved additional restrictions, including a ban on advertisements for payday loan services on City property. (Like buses.) https://t.co/JBTPQfba6o— Matt Elliott (@GraphicMatt) October 2, 2019
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.
That’s good, but what are the options for people with bad credit? Some people have bad credit and let’s say they are on ODSP and get $1300/month. Where do they go if they need a loan? This is a good start but doesn’t solve much.— bean. (@righteousbean) October 4, 2019
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."
Join the conversation Load comments