Councillors considering legislation to limit number of payday loan outlets in Hamilton

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Meeshika Sharma
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City of Hamilton councillors are set to vote today on a motion to limit the number of payday loan outlets in the city, after accusations of "predatory" behaviour from activists.publive-image

The radial separation legislation before council is aimed at keeping payday loan companies from targeting low-income communities, whose members often turn to the high-interest businesses in desperation, but fall further into debt because of the high interest rates and fees that come with the loans.

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

The city's latest attack on the lenders comes from Councillor Matthew Green, who said he proposed a cap of one lender per ward, or a total of 15 city-wide after discovering that loans of $300 were costing locals up to $1,600 because of fees and annualized interest rates he found to be about 546 per cent.

The Ontario government decreased the cost of borrowing a payday loan from $21 to $18 per $100 in 2017 and dropped it down again to $15 this year.

publive-imageCouncillor Matthew Green and Activist Tom Cooper think the legislation, which they say has been backed by most councillors, is likely to pass and "sends a strong message to the industry that their days are numbered."publive-image

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