Predatory lending

predatory lending. One demonstrator stood in a striped prisoner’s uniform with a ball and chain around her ankle, symbolizing consumers “held captive” by highinterest loans.

Though staged in front of an easyfinancière branch, Bonin said the choice of location was “symbolic, because easyfinancière is a high-cost lender expanding in Quebec.” The real targets of the protest were federal and provincial governments.

In Quebec, interest rates on loans can be as high as 35 per cent per year.

The easyfinancière website lists loans at that maximum rate.

Federal law makes it a criminal offence to charge interest above 60 per cent. Still, “alternative lenders are pretty creative,” Bonin said. They often tack on extra fees that don’t count toward the interest limits.

“We’re hoping that the criminal rate is lowered and includes the set of fees that the person has to pay,” Bonin said. She’s also looking for better enforcement of laws already on the books.

Predatory loans often affect those with poor credit scores who can’t rely on traditional financial institutions, Bonin said. This group often includes immigrants and young people, who she said are “somewhat neglected by banks.”

“Most newcomers don’t have a credit score when they arrive here,” said Charphadine Nagombe of the Fédération des communautés de l’estrie, who addressed the crowd on behalf of the immigrant rights organization. “Many don’t even know what a credit score is,” he added. As a result, “they end up with abusive interest rates.”

“We really find this situation deplorable,” Nagombe said. “We’re asking authorities to find solutions to these problems which impoverish the community.”

Even those with good credit score might turn to alternative lenders when looking for smaller loans, Bonin said. “Many financial institutions have neglected the small loans market, because it isn’t very profitable.” She said banks also bear “a certain responsibility” for driving consumers toward predatory loans.