Payday Loans

Control payday loans, panel says

* PUBLICATION: Toronto Sun
* BYLINE: Jonathan Jenkins
* DATE: Saturday, February 7, 2009

An independent provincial panel recommended yesterday Ontario limit interest payments and fees charged by payday loan companies to $21 for every $100 borrowed, winning support both in the industry and from anti-poverty activists.

“This is a really great day for us because we’ve been fighting against the high payday lending rates for a long time. This finally gives us the regulation in Ontario that we need,” said Elise Aymer, a member of the Association of Community Organizations for Reform Now (ACORN).

The panel recommended the $21 cap yesterday, saying it was a balanced approach that would ensure the industry could continue while still providing protection to consumers — typically low-income people who have exhausted traditional and cheaper lending alternatives.

The panel was appointed by the government last summer after it passed the Payday Loans Act, the first attempt to regulate the industry.

ACORN would prefer payday loans be banned but Aymer said the cap is a good first step. She said she hopes the cap could even be lowered in the future. The panel also recommended a review in two years.

Stan Keyes, president of the industry group the Canadian Payday Loan Association, said the panel’s recommendations were balanced and he expects the government to accept them. “Kudos to them. They stuck to the mandate, .” Keyes said of the panel.

Some unscrupulous lenders who charge very high rates and fees may go out of business and others may feel pain, but Keyes said the industry recognizes the need for consumer protection.

This entry was posted in Uncategorized. Bookmark the permalink. Post a comment or leave a trackback: Trackback URL.

Post a Comment

Your email is never published nor shared. Required fields are marked *