Toronto city council praised for crackdown on payday loan shops

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Toronto city council praised for crackdown on payday loan shops
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They bring down the level of the neighbourhood,” said O’Sullivan, co-ordinator of the Weston Village Business Improvement area. “If you walk into the area and there’s a lot of Money Marts, it doesn’t say much about the area, does it?”

 

She among those praising a decision that aims to make sure her neighbourhood doesn’t become a template for other areas of the city.

 

Council has directed city staff to craft a bylaw that would prohibit “predatory lenders” from setting up shop within 400 metres of each other. Right now, Toronto is home to 134 payday loan and cash-for-gold establishments, many of which are situated in low-income areas.

 

Coun. Frances Nunziata, who represents the Weston area, considers them a blight in her ward — and others across the city.

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“You’d have five or six on one block, as soon as a you see a vacancy, a payday loan store would open up,” said Nunziata, who helped lead the charge for the new bylaw. “They’d survive maybe a year or so, close down, and another would open up.”

 

Four years ago, her house was broken into and her jewellery was stolen. Police advised her it might have ended up at one of the cash-for-gold and payday loans shops on Weston Road.

 

It’s not just the businesses’ association with crime that bothers her. It’s also the effect they have on low-income residents, many of whom take out short-term loans and end up in a cycle of debt, Nunziata said.

 

That’s because in Ontario, two-week payday loans have a maximum fee of $21 per $100 borrowed — that’s an annual interest rate of 546 per cent. If borrowers can’t make their payment and turn to another payday loan institution to pay it back, the interest can quickly spiral out of control.

 

Along with taking action to end the clustering of loan stores, council is asking Queen’s Park to limit the interest rates loan stores can charge to 35 per cent a year. Similar legislation in Quebec effectively outlawed the payday loan industry.

 

The province is reviewing payday lending and similar alternative borrowing through  public consultations. A bill working its way through the legislature will enable the province to enact new industry regulations.

 

“Certainly changes to the cost of borrowing are being considered,” said Anne-Marie Flanagan, a spokeswoman with the Ministry of Government and Consumer ServicesThey bring down the level of the neighbourhood,” said O’Sullivan, co-ordinator of the Weston Village Business Improvement area. “If you walk into the area and there’s a lot of Money Marts, it doesn’t say much about the area, does it?”

 

She among those praising a decision that aims to make sure her neighbourhood doesn’t become a template for other areas of the city.

 

Council has directed city staff to craft a bylaw that would prohibit “predatory lenders” from setting up shop within 400 metres of each other. Right now, Toronto is home to 134 payday loan and cash-for-gold establishments, many of which are situated in low-income areas.

 

Coun. Frances Nunziata, who represents the Weston area, considers them a blight in her ward — and others across the city.

 

“You’d have five or six on one block, as soon as a you see a vacancy, a payday loan store would open up,” said Nunziata, who helped lead the charge for the new bylaw. “They’d survive maybe a year or so, close down, and another would open up.”

 

Four years ago, her house was broken into and her jewellery was stolen. Police advised her it might have ended up at one of the cash-for-gold and payday loans shops on Weston Road.

 

It’s not just the businesses’ association with crime that bothers her. It’s also the effect they have on low-income residents, many of whom take out short-term loans and end up in a cycle of debt, Nunziata said.

عدلات

 

That’s because in Ontario, two-week payday loans have a maximum fee of $21 per $100 borrowed — that’s an annual interest rate of 546 per cent. If borrowers can’t make their payment and turn to another payday loan institution to pay it back, the interest can quickly spiral out of control.

 

Along with taking action to end the clustering of loan stores, council is asking Queen’s Park to limit the interest rates loan stores can charge to 35 per cent a year. Similar legislation in Quebec effectively outlawed the payday loan industry.

 

The province is reviewing payday lending and similar alternative borrowing through  public consultations. A bill working its way through the legislature will enable the province to enact new industry regulations.

 

“Certainly changes to the cost of borrowing are being considered,” said Anne-Marie Flanagan, a spokeswoman with the Ministry of Government and Consumer Services

For more visit http://www.payday-loans-ontario.ca/

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