Hamilton moves to limit payday loans

PROPOSED CAP LIMITING THE NUMBER OF PAYDAY LOAN OUTLETS IN CITY CLEARS VOTE

A Hamilton councillor’s bid to cap the number of payday loan outlets in the city cleared another hurdle Tuesday when it was unanimously approved by the city’s planning committee.

Coun. Matthew Green proposed the legislation, which will allow only one lender to operate in each of the city’s 15 wards, in an effort to limit “predatory” behaviour by payday loan companies. He says the businesses target low-income communities, whose members often turn to the businesses in desperation, but fall further into debt because of the high-interest rates and fees that come with the loans.

Green said it will become a law if it’s ratified at a meeting in two weeks, giving council time to mull over an exemption to the proposed cap requested Tuesday by a councillor with the Flamboro Downs casino in her ward.

Despite the exemption request, Green said he thinks the cap “will pass unanimously, if not overwhelmingly unanimously.”

Hamilton is one of the few cities in Ontario to consider such legislation, adding to its ongoing crusade against payday loan companies. It previously required them to be licenced, to educate the public on how their rates compare with traditional lenders and to share information on credit counselling with customers.

Green’s attack on the lenders came after he discovered that loans of $300 were costing up to $1,600 because of fees and annualized interest rates he found to be about 546 per cent.

“This is no way for people living in poverty to try to get by,” he said. “The targeting of our inner city neighbourhoods was a bit pernicious ... we had more payday loans in some kilometres than Tim Hortons.”

He believes payday loans companies should be abolished, but settled for fighting for the per-ward cap because the provincial and federal governments have allowed the process to continue and he lacks the power to overturn them.