Windsor council hopes to educate public on risks of payday loans
CBC
Windsor city council is looking to educate the public on the risks associated with payday loans.
Council is due to receive a report on the matter from city administration at Monday's meeting.
Ward 3 Coun. Rino Bortolin said regulation wouldn't likely have much of an effect on the city's payday loan businesses, which can charge very high interest rates.
"When we discussed it last time, we focused on a lot of the questions focused on how beneficial the licensing regime would be in actually achieving the outcomes," Bortolin told CBC News on Friday. "And the outcome is really to have people not frequent them as often and keep more, more of their own money in their pocket."
A better option, he said, might be to educate the public about the risks associated with taking high-interest loans.
"I think at the end of the day, if we license them and restrict them — we've already got about a dozen or so — those aren't going to go anywhere," Bortolin said. "You won't really see much change, except if some close later on down the line."
Putting a restriction on where payday loan businesses can be located, for example, wouldn't stop them from operating and engaging in what Bortolin called "predatory lending practices."
Bortolin said he's interested in seeing the city create a committee that will work with community partners, such as agencies that issue social service cheques, and speak with people using the payday loan businesses about other options.
"I think the key is to make sure that [you] tell them 'do you know you can go to a credit agency and get it for eight per cent instead of 20 per cent, for example, or even lower?'" he said. "I know, for example, the city has been working with social services to get more people to do direct deposit."
There are challenges, however, he said. Banks may not cash a cheque for someone who doesn't have an account with them, for example.
Credit unions have been working to expand how they provide services, Bortolin said, but access has also been limited due to the COVID-19 pandemic, as some branches have temporarily closed down.
Bortolin said an option may be to include a pamphlet with social service cheques that includes information about ways to cash or deposit the cheque that don't involve visiting a payday loan business.
Michellle Chase said she and her husband made use of payday loan businesses in the past when she was working a minimum wage job and missed time due to being ill.
"Before you knew it, we couldn't get out from from behind it," she told CBC News. "We actually ended up having to claim bankruptcy to get out of the hole."
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