City moves to curb spread of payday loan outlets

[canada-man]

Ottawa is a step closer toward controlling the concentration of payday loan outlets in some of the city's lowest-income neighbourhoods, and limiting the spread of the high-interest moneylenders.

On Wednesday city council readily approved Mayor Jim Watson's motion directing staff to come up with a new set of rules governing payday loan outlets, which he said "prey on the poor and the vulnerable."

Mayor hopes to cap Ottawa's 'glut' of payday loan outlets

The businesses are not considered banks and can therefore charge extremely high interest rates. The outlets are concentrated along Montreal Road in Vanier and Bank Street in Centretown.

No say over existing outlets
The province recently changed the Ontario Municipal Act to allow cities to limit the number of payday loan outlets.

Before they can do that, municipalities including Ottawa must alter their zoning rules and consult with the public, especially segments of the population that would be most directly affected by the restrictions.

City staff will look at capping the overall number of outlets, as well as setting a minimum distance between them. Staff will bring recommendations back to council in early 2019.

Staff will also look at whether the city should consider licensing payday loan outlets, making it more costly for the businesses to operate, a move being considered in Toronto.

But even if and when new restrictions come into force, it could be years before their effect is felt. That's because the city has no power to close existing outlets, and there's nothing to stop new ones from setting up shop before the rules change.

http://www.cbc.ca/news/canada/ottawa/payday-loans-limit-number-concentration-1.4614365

 

[glamphotographer]

What's to going rate at these places? 20%-30% for every $100?

 

[saxon]

No one is forcing people to use these places so if someone is dumb enough to take a payday loan at 28% then they can’t cry about it.

 

[IRIS]

What's to going rate at these places? 20%-30% for every $100?

It's around 500% interest / year if you can't pay back the loan. Every second week they took 20% interest from your paycheck but the original loan still there.
So you ask 500$ they took 100$ ( 20%) interest every second week from your paycheck, until you pay back the 500$.
So 52 weeks = 26 paycheck. You paid 2600$ interest of the end of the year and you still owe the 500$. Worster than any organizer crime loan and it's legal. It's a shame.

 

[Occasionally]

A tough call.

Pro
- Fast money if you need it quick
- More likely to lend you money than going through banks
- If banks don't want to loan you money, the government doesn't want to give you money, your last recourse might these kinds of place..... options. Shitty option, but it's an option

Con
- You pay a lot for what you borrow. Paying $20 to borrow cash advance $300 doesn't sound like a lot, but that's still 7% for what is probably a one month pay back period or else you get hooped for more. A bank's line of credit is probably only 5% over an entire year.... Prime +0-5% depending how good your credit is
- You can get tangled up in forever high interest loans which will spiral if you don't pay it off fast..... which can be likely because the people who need this fast money are broke and don't budget well to begin with

A broke person using money centres to take out money to buy a new TV is an idiot. A broke person using money centres to pay for rent and food isn't.

What's the government doing to help people out with poor budgeting (TV guy), or prevent poor people from resorting to insane fees to pay for necessities (rent and food guy)?

Is the government giving out no-interest loans or forcing banks to help out poor people with loans with favourable terms?

 

[Smallcock]

Usury

 

[explorerzip]

I don't have much sympathy for people that choose to use pay day loans to buy non-essential "stuff" like electronics, clothes, vacations, etc. I do have sympathy for people that might rely on them to pay for rent, food, etc. In either case, those people end up on a never ending cycle of debt. So I do feel that government (even though I generally don't think they can do it properly) to do something about this major issue. I think it's going to take more than just building more affordable housing, increasing social assistance, etc. The solution has to be self-sustaining for the long-term.

One of the root causes people find themselves in these situations is lack of financial education in schools. We have not been teaching our students about financial basics like savings, budgeting, good and bad debt, interest, mortgages, etc. let alone investing. Yet we expect them to figure out this stuff on their own? So it's no wonder that credit cards are being pushed aggressively at students once they reach higher education. I'm glad that Ontario is finally starting to teach these topics starting in grade 4, but I also think it doesn't go far enough. They should actually start it as early as possible.

You may want to check out an interesting documentary series called Dirty Money on Netflix that will make your blood boil. Specifically, the second episode is about Scott Tucker who built a small pay day loan empire and SPOILER ALERT: is now in federal prison for racketeering and making illegal payday loans.

 

[Polaris]

Exploitation of the ignorant.

Not to mention, the poor and desperate.

Fucking government. You think they care about people. No fucking way.

Why don't the government cut taxes. Scrap the sales tax all of it, drastically lower the income tax, and let people spend their money.

Listen to the oppressed black person in America. They claim that black people drive the economy, because whatever money they happen to find, they spend every single penny of it.

Right now, those poor blokes, spend all of their money, but give a cut to the giant corporate loan shark, and a big cut to the government shark via sales tax.

It is not fair. Yet all we hear is how cold hearted the conservatives are and the white left is going to save society.

The white left is full of it.

All the white left is interested in is to feel good about themselves and help themselves.

People wonder why Prez Trump got elected and how Mr. Ford is riding high right now.

:ambivalence:

 

[rhuarc29]

No one is forcing people to use these places so if someone is dumb enough to take a payday loan at 28% then they can’t cry about it.

Normally I'd agree with that, but then taxpayers end up supporting these morons.

 

[Polaris]

Now I am getting really angry!

The fucking government!

So they are going to ban the concentration of payday loans sharkin' to protect the poor from being taken advantage of. The white left will feel GOOD about themselves that they have made a difference.

What about the internet?

Yeah ... that fucking internet, with fucking online ... fucking anything you fucking want internet ...

fucking copy and fucking paste straight from the fucking corporate loan shark fucking website
https://www.moneymart.ca/payday-loans-toronto
When you need a payday loan in Toronto, apply online, and get the cash you need quickly and conveniently. You can apply online or at any one of our many MONEY MART branches. You can also have your payday loan directly deposited into your bank account without even needing to leave your home. When you apply online you will get the same support as you would receive when applying for a payday loan in Toronto at one of the MONEY MART stores.

And they want to "controlling the concentration of payday loan outlets in some of the city's lowest-income neighbourhoods"?

They just want to get rich off this poverty industry the fucking government.

I don't even need a loan and I found out how to do this in 5 minutes!

The desperate always find a way. Too bad for the country that the damn white left government is right there to exploit the situation, then blame Mike Harris and Stevn Harper in the same breath.

:afro:

 

[james t kirk]

I don't know how they work here, but in the states it's a scam.

Say you borrow 500 bucks.

You MUST pay the 500 plus interest of x back in full in 2 weeks. The interest is like a hundred or so dollars.

Now when you got the loan, they get permission to access your bank account.

But what they say in the fine print in a very confusing fashion is that if YOU don't repay the principle plus interest IN FULL in 2 weeks, that they will have to "renew" the loan. Further down, deep down in the mouse print is the fact that there is a fee to "renew" the loan and that they will automatically deduct that fee from your account on your next payday. The fucking fee is like $45.00 every 2 weeks.

People think they are paying off the principle, but all they are paying is the "renewal" fee.

Only when the money never stops coming out do they figure something is wrong and then they get upset. 500 bucks can end up costing you a couple of grand.

That's the scam.

Why does a loan need to be renewed every 2 weeks and why is there a fee?

 

[Piratos]

Canada is a haven for payday loan operators. Usary is much more restricted in the US for instance.

I see the Canadian government does provide a helpful guide showing how you can end end up with a 546% apr. on payday loans. Unfortunately I doubt most payday loan customers are prowling the web looking for financial advice.

https://www.canada.ca/en/financial-consumer-agency/services/loans/payday-loans.html

 

[underice]

27 % of people who apply for pay day loans earn over 80 k a year.That was the statistic on 1010 radio last night from a woman who wrote a book on finances.So,now all these "stupid" people earn over 80 k? You most likely know some of these people,they just wont admit they use payday loans.

 

[blueray]

Why does a loan need to be renewed every 2 weeks and why is there a fee?

Because thats how they make lots of money...and it is written in the fine print that nobody reads. It's a Legal Scam.

 

[explorerzip]

27 % of people who apply for pay day loans earn over 80 k a year.That was the statistic on 1010 radio last night from a woman who wrote a book on finances.So,now all these "stupid" people earn over 80 k? You most likely know some of these people,they just wont admit they use payday loans.

Some people think they need to keep up with the Joneses (fancy car, house, clothes, vacations, restaurants, etc.) no matter what they are making. So it's not surprise that someone making $80K or even more might need a payday loan.

 

[corrie fan]

Rent to own companies that deal in furniture, appliances and electronics are just as bad as payday loan companies. Their customers pay for the products many times over before they own them. In some cases the item they receive isn't even new.

 

[Piratos]

27 % of people who apply for pay day loans earn over 80 k a year.That was the statistic on 1010 radio last night from a woman who wrote a book on finances.So,now all these "stupid" people earn over 80 k? You most likely know some of these people,they just wont admit they use payday loans.

https://www.canada.ca/en/financial-...research/payday-loans-market-trends.html#toc6

 

[elwoodinontario]

Alberta cracked down on payday lenders, and now they only lend to the safest of lenders, essentially punishing their riskier clientele.

 

[mandrill]

Canada is a haven for payday loan operators. Usary is much more restricted in the US for instance.

I see the Canadian government does provide a helpful guide showing how you can end end up with a 546% apr. on payday loans. Unfortunately I doubt most payday loan customers are prowling the web looking for financial advice.

https://www.canada.ca/en/financial-consumer-agency/services/loans/payday-loans.html

All of this stuff used to be illegal and was a federal crime called "usury". There was a push to decriminalize these high cost loans a few years ago if the provinces would "regulate" the industry. Unfortunately, conventional consumer protection regulation is not very effective with a consumer target group which is mainly low income and often desperate.

Usury was any loan which cost - all things included - more than 60% per year. This seems a pretty good rate of remuneration to me. Why any legal system would allow 500%+ interest per annum is completely bey ond me. They should go back to being illegal.

 

[Occasionally]

Money lending places are the worst of the worst when it comes to payment charges, but that example in the link (need $300 to repair your car) is misleading.

A good portion of places that give you the option to finance purchases (let's say you buy furniture at Leons) charge admin fees as well.

Though it seems a payday place will keep charging you new fees over and over again which piles up, as it seems they reset the terms duration and recharge high fees to keep it going. This is the problem, NOT the initial $63 (like in the example for a $300 fee).

A place like Leons will charge you around $50 as well. So you buy a table for $300 and need to finance it, you will pay $50 too to finance it. However, you don't have to keep paying a new admin fee. It's a one shot fee over 12 or 24 months.

The link is good though as it shows that lines of credit are the best bet out there. Just about everyone should be able to get one. Yet, idiots would rather go on debt with their credit card and carry a balance at 20%, instead of a balance on a LoC at a rate of Prime + x% which should be maybe 5-7% for most people.

The thing is most people are lazy fucks. Instead of putting in 5 minute of effort to apply for a LoC at the bank and use that as a source of short term loan funds, they'd rather do the easier thing which is always..... use a credit card. Amazingly, I'm sure payday places require time and effort to get a loan from them. So if that's the case, use that time and see if a bank will give approve you a small LoC account.

Even worse, most banks will send you mailers reminding you LoC are available. Just apply and likely will get approved. Yet, 99% of people throw it out and keep using their VISA or Mastercard with balances of 20+%. Morons.

The problem with LoC is that the limits are higher. The first LoC I received was like $30,000 which is crazy. The first credit card I had had a limit of probably $5,000. So someone with poor budgeting and goes on a shopping spree can have access to high limits at low rates, or lower limits at high rates. Both are tempting and bad options to have for people who go on debt.

Only time I had debt (excluding car and home loans) was when I first moved out and needed cash to buy furniture. Even a a newbie to the workforce, banks still gave me LoC and I bought the stuff using it. I also needed to take advantage of their "No Interest 18 or 24 month plan". So I paid the admin fee, ad paid it off over a a year or two after paying for it with my LoC.

Much cheaper than trying to cover it with a credit card at who knows what rate it was.... probably 20% or so.

The best rate out there is bumping up your mortgage, which is probably at a rate of 2-3%. But that's more for people who are already established and need good chunks of money to do home renos and such. As long as you can pay it back fast, it's the best rate out there. I'd never do this as I don't need big money to cover anything, but it's another option.