No Real Change to Payday Loan Lending Rates in the New Year

(This story originally appeared at www.hamiltonjustice.ca)

Maybe you missed this announcement in December from the Ontario government? 

"Our government is committed to protecting consumers and helping people in their everyday lives. This includes lowering the cost for taking out a payday loan, and further changes to ensure that financial services are fairer and more transparent for all. " — Marie-France Lalonde, Minister of Government and Consumer Services

This is how the Minister characterizes lowering the maximum total cost of borrowing for a payday loan from $21 to $18 per $100 borrowed.  That new protection will happen on of January 1, 2017.  This move, after years of dilly dallying, lowers the interest rate that predatory lenders can charge from 546% to 390% per annum.  The Criminal Code says charging anything above 60% is a crime. But Ontario and most other provinces believe an exemption is in order for this so-called industry. (We’ve written before on this.  See http://www.hamiltonjustice.ca/blog?post=Province+Getting+it+Wrong+on+Payday+Loans&id=369)

Legislating the Banks

Prior to the Ontario announcement, the Canadian Centre for Policy Alternatives put out a report developed through a survey of ACORN Canada members who have accessed payday loans.

In A Survey of High Interest Alternative Financial Services, author Joe Fantauzzi concludes that banks “through denying low and moderate income families access to credit, are driving people to access fringe high interest products like payday loans, installment loans and more.”

So, the federal government should insist that banks be more responsive to low and middle-income families.  The report suggests that access to low interest credit for emergencies and low interest overdraft protection be legislated.  Lowering NSF fees from $45 to $10 and ensuring no-holds on cheques would be positive changes.  Alternatives to predatory lenders like a postal bank and credit union products geared to moderate and low income households are also called for.  Here is the report.
https://www.policyalternatives.ca/publications/reports/predatory-lending

Together with the payday loan industry the Ontario government has become a partner in predation. 

Perhaps the federal government can change this.  The CCPA’s report shows how.

Canadians Need Access to Reasonably Priced Financial Services

(Here is a letter to the editor I sent recently to a number of newspapers .)

Dear Editor,

Good communities provide residents and businesses with easy access to reasonably priced financial services.

Such access is eroding in Canada.

The big five chartered banks have been exiting downtown cores of major Canadian cities for years.

Many small communities, have no banks or credit unions at all.

Moreover, fees are an issue. Only thirty years ago, banks did not charge fees but now these charges are amongst the highest in the world.

“Fringe” financial institutions like Money Mart and the Cash Store have stepped in to fill the void and make big bucks while charging exorbitant fees.

There is some regulation of these fringe institutions. In 2008, for example, the Ontario government, concerned about excessive charges, brought in regulations. These controls were inadequate so the government is in the process of setting new rules.

Meanwhile many Canadians don’t have bank accounts.

The solution to this problem (and others) is to bring back postal banking.

Canadians had access to Postal Banking for more than one hundred years. When the Post Office Savings Bank ceased operations in 1968, nearly 300,000 accounts closed down. At its peak in 1908, deposits in the bank totalled 47.5 million (equivalent to $1 billion in today’s money). Meanwhile postal banking is thriving in other parts of the world. Japan Post Bank, for example, has $2 trillion in assets.

The government is currently conducting a public review of Canada Post, Postal banking is an idea whose time has come again.

Bob Wood
Port Rowan

Interested readers can learn more at DeliveringCommunityPower.ca

In the Year 2092

I try to make it a practice this time of year to look back on the past year’s writing efforts.   I started to do that recently but then I was sidetracked.  Nothing new in that.

I’m working on a story on David Halton’s fascinating biography of his father Matthew (Dispatches From The Front). My muddled writing approach to this and other projects found me fumbling around in a bookcase looking for Churchill’s Second World War series.  On the middle shelf, next to The Gathering Storm, I stumbled onto a book my uncle had written.

It is entitled Modern Magazines.  At 238 pages, it was nicely bound and almost totally completed seventy-six years ago in 1936.  I’m quite certain there was never a final edition published.   J.J. Wood believed that magazines needed to be studied and enjoyed.  As Jack says in his foreword: “Undoubtedly, many people do not even know of the existence of magazines which would give them the greatest pleasure and profit."

For many years until his death in 1959, Jack taught English to vocational students at Westdale High School in Hamilton.  This particular book, one of many of his I have around the house, came out of his belief that students needed something more appropriate and accessible to their day-to-day lives than the standard English course fare. The book was comprehensive and through.  Uncle Jack wrote quite well.  While I’m not an expert, I imagine that there have been some courses offered somewhere on Modern Magazines.  It is probably fair to say though that they didn’t catch on like, say, Computer Science and Technology has today.

All this brought me back in my own self-centred way to my own writing.  Have I written anything this year that someone would look a back on in 78 years and even care about?

Let’s see.

Like others, I spent too much time following Toronto politics.  To justify this dalliance, I reviewed Robyn Doolittle’s book Crazy Town.  http://whenthemayorsmiles.blogspot.ca/2014/09/crazy-town.html.  I’m guessing that the antics of the leaders of  Ford Nation will prompt as much head shaking in the late 21^st century as they have in the in the past four years.

What will our banking system be like in 2092? Will we even have one?  I’ve argued that right now we don’t have one that works for a good number of our citizens.  In a blog piece at www.hamiltonjustice.ca I came back to a theme that I’ve touched on before.  We need accessible banking services. Uncle Jack would find that amusing, I think, as he had a banking service in the post office in his day.  Here is one of those stories. http://www.hamiltonjustice.ca/did-you-know.php

At Forever Young Information, where I write a fair bit, much of my input leans to  “then the hilarity ensues” as my editor requests and I hope to oblige.  There were, however, some serious efforts like this one where I tried to capture why birding matters.  http://foreveryoungnews.com/posts/2641-birders-aflutter-on-ontario-s-south-coast

I believe, though, that my nomination for an article that is likely to make no sense in 2092 is a story I called Court Rulings of Significance for Ontarians with Low-Incomes.  A great title, right?  In this piece, I tried to shed a little bit of light on one court ruling regarding the social assistance system in Ontario.  This was my greatest challenge in the past year: making sense of the nonsensical.

I’m hoping in 2092 people will look at it and say that the system that the idiot blogger tries to describe doesn’t make any sense.  It doesn’t (make sense) and, hopefully, long before then someone will have figured that out.

Here it is from the blog of www.hamiltonjustice.ca

Court Rulings of Significance for Ontarians with Low-Incomes

Recently the Supreme Court of Canada made an announcement of significance for Ontarians with low-incomes.

The ruling related to what is known as the Surdivall Case.

Here is some history on this case.

Mr. Surdivall is a disabled senior.  He received Ontario Disability Support Program (ODSP) income support until he turned 65.

Mr. Surdivall made an innocent reporting error in 2009 which resulted in him being over paid.  By the time the matter reached the Social Benefits Tribunal, Mr. Surdivall had turned 65 and was no longer on ODSP. He was ordered to pay half the outstanding balance, at a rate of $10/month. This amount was more than he could afford.

The law in Ontario says that overpayments can be recovered.  A court (Divisional Court) ruled against Mr. Surdivall.  Their ruling basically said that social assistance recipients couldn’t challenge rulings for collection of overpayments, no matter how unfair the circumstances.

However, later a higher court took a different view.  The Court of Appeal confirmed that both the Director of ODSP and the Social Benefits Tribunal do, in fact, have the ability discretion to waive collection of overpayments in appropriate circumstances.

Legal Aid Ontario’s blog notes that “the court recognized that people on welfare often receive overpayments for reasons entirely beyond their control and, potentially, because people with power over them have abused the system.”  http://blog.legalaid.on.ca/2014/04/17/victory-at-ontario-court-of-appeal-protects-rights-of-people-receiving-social-assistance/

Following this ruling, the Director of ODSP asked the Supreme Court of Canada for permission to appeal.  On September 25th of this year, the Supreme Court refused that request.

Mr. Surdivall was represented by Jackie Esmonde and Cynthia Wilkey from the Income Security Advocacy Centre, a Specialty Community Legal Clinic.  Others involved in presenting the case were ARCH Disability Law Centre and Metropolitan Action Committee on Violence Against Women and Children who were represented by Cynthia Pay of Parkdale Community Legal Services. The Court of Appeal decision can be read here: http://www.canlii.org/en/on/onca/doc/2014/2014onca240/2014onca240.pdf