Hamilton looking to curb payday loan outlets
The city of Hamilton is hoping to curb the use of payday loans with a new bylaw. The outcome of the new law would be to limit the number of payday loan outlets in the city at 15 and no more than one per ward. Currently there are 30 operations running in Hamilton, and the majority of the outlets are situated in Wards 2 and 3, located in the downtown core and in the central lower part of the city.
According to the proposed bylaw, "It also recognizes and permits the 30 locations, where establishments currently licensed with the city, may operate provided the premises continues to be used for such purposes, the business owner maintains their licence and the business carried on therein is in compliance with this by-law.
Hamilton’s Roundtable for Poverty Reduction director, Tom Cooper, said that the bylaw should help to enable people to look into other options for when they run into a financial emergency instead of payday loan outlets.
"By taking this step, Hamilton is really putting the payday loan industry on notice that their days of exploiting vulnerable consumers are at an end," said Cooper. "It's an industry that's predatory and we want to do everything we can to ensure that their aggressive tendencies are curtailed and if that means preventing more outlets from opening up, that's good and if it means rolling back the ones that exist, that's even better.”
The city of Hamilton is now able move forward with a bylaw like this thanks the new provincial rules that were put in place under Bill 59, the Putting Consumers First Act. In addition to expanding the municipality's authority, the bill also includes the following additional regulatory changes, which remain under the provincial regime that will come into force on July 1, 2018:
- Mandatory extended payment plan for borrowers with three or more loans with the same lender within a 63-day period.
- Loan limit of 50 per cent of a borrower's net pay per loan.
- The cost of borrowing a payday loan must be disclosed as an annual percentage rate in advertisements and agreements.
- Maximum fee for cashing government-issued cheques capped at $2 plus one per cent of the face value of the cheques, or $10, whichever is less.
- Mandatory provision for a receipt when cashing government-issued cheques.