Wednesday, September 09, 2015

Regulating the Predatory Lenders

Ward Three Councillor Matthew Councillor Green (pictured to the right) has a motion coming to Hamilton City Council on Wednesday September 9th.  The motion is requesting authority from the Province for the City of Hamilton to limit the number and regulate the locations of payday loan cheque cashing outlets.

Many other municipalities in Canada and the United States have implemented tighter restrictions on payday loan companies. In Winnipeg, for example, payday lenders must be a minimum of 1,000 feet apart. Another municipality, the town of Esquimalt, has increased its business license fee from $100 to $2,000. ( About 200 U.S municipalities are regulating these predators.

Last month, Global reported that cities in Alberta were banding together to fight against the 600% interest rates allowed by law in that province. (

They'll put payday loan companies out of business, argues lobbyist Stan Keyes.

While many would like these guys put out of business altogether, alternatives are needed because the major banks have abandoned low-income communities and earners.  In Sheffield England, Council has come up with an alternative by offering municipal loans to residents.

I've argued that postal banking could be an alternative that would provide access to financial services for all Canadians.  HTTP://WWW.HAMILTONJUSTICE.CA/BLOG/?POST=PAYDAY+LENDERS+CONTINUE+TO+OUTRAGE+US&ID=303)

In the meantime, I commend Hamilton's Councillor Green for his initiative.

Here is his motion:

WHEREAS the Province of Ontario’s Ministry of Consumer Services is responsible for the Consumer Protection Act and the Payday Loans Act which regulates and licenses money lending businesses;

WHEREAS the Province of Ontario regulates the interest rates of money lending businesses while Municipalities have the authority to regulate and license businesses to protect consumers if this is not already done by the Province;

WHEREAS the use and expansion of payday loan and cheque cashing outlets in Hamilton neighbourhoods is a significant consumer protection issue identified by the Hamilton Roundtable for Poverty Reduction and neighbourhood and community groups; and

WHEREAS it is important that customers of payday loan and cheque outlets have a complete understanding of the financial services being offered.


(a) That the Mayor be authorized to forward correspondence to the Province of Ontario, to the attention of the Minister of Consumer Services, requesting that the protections afforded by the Payday Loans Act be strengthened and that Municipalities be authorized to limit the number and regulate the locations of payday loan and cheque cashing outlets;

(b) That Staff be directed to research the feasibility of licensing payday loan and cheque cashing outlets to assist in consumer protection by requiring the businesses to post their rates, show comparative and annualized rates and information regarding debt counselling.

(c) That staff analyze and map pay day loan and cheque cashing outlets in Hamilton and report back to Council on recommendations for alternative accessible financial services for Hamilton residents.