By David McLaren The Ontario government recently asked the public for submissions on its proposal to reduce the lending rate Payday loan companies can legally charge for short-term loans. Currently the rate in Ontario is 21% over the duration of the loan. With fees and interest over a year, that rate can climb north of 500% per annum.
In the sort of economy we have now, where people with short-term, or part-time work at a minimum wage of $11.25 an hour (instead of a living wage of $15+), many folks have no choice but to take these predatory loans to get to the end of the month.
If you’ve used these loans, you may have discovered those easy-money, short-term loans become a big load of long-term, hard-time debt. You are then encouraged to borrow even more in a vicious cycle of pretending you can eventually pay it off.
Payday loan sharks (and those rent-to-own outfits) know this and they capitalize on it. They are not filling a need. They are helping to create a need that they then feed off. They are the very definition of vampire capitalism that leaders as disparate as Pope Francis and Donald Trump rail against.
Surely, with the release of the United Way’s WTF (Where’s the Food) Report, we can no longer pretend workers are not living in poverty in Bruce Grey. Food bank usage has increased over 92% in 2 years. How is this in any way acceptable? Are we to pretend this is all part of the new normal in post-Recession Canada?
Bruce County Council, Grey County Council and Owen Sound all had an opportunity to show leadership by becoming living wage employers. They turned it down. Ontario has a chance (narrow though they’ve made it) to do something about the Payday loan industry.
That is why we at the Bruce-Grey-Owen Sound NDP responded to the Ontario government’s request for comments on their proposal by saying that regulating this industry is like trying to make a silk purse out of a sow’s ear. It gives their business model the colour of legitimacy, and it postpones the sort of serious change that’s needed.
So we said to the Wynne government:
You can find the full text of our submission on Payday loan companies at
http://www.bgos-ndp.ca/submission-to-ontario-on-payday-loan-companies.html
In the sort of economy we have now, where people with short-term, or part-time work at a minimum wage of $11.25 an hour (instead of a living wage of $15+), many folks have no choice but to take these predatory loans to get to the end of the month.
If you’ve used these loans, you may have discovered those easy-money, short-term loans become a big load of long-term, hard-time debt. You are then encouraged to borrow even more in a vicious cycle of pretending you can eventually pay it off.
Payday loan sharks (and those rent-to-own outfits) know this and they capitalize on it. They are not filling a need. They are helping to create a need that they then feed off. They are the very definition of vampire capitalism that leaders as disparate as Pope Francis and Donald Trump rail against.
Surely, with the release of the United Way’s WTF (Where’s the Food) Report, we can no longer pretend workers are not living in poverty in Bruce Grey. Food bank usage has increased over 92% in 2 years. How is this in any way acceptable? Are we to pretend this is all part of the new normal in post-Recession Canada?
Bruce County Council, Grey County Council and Owen Sound all had an opportunity to show leadership by becoming living wage employers. They turned it down. Ontario has a chance (narrow though they’ve made it) to do something about the Payday loan industry.
That is why we at the Bruce-Grey-Owen Sound NDP responded to the Ontario government’s request for comments on their proposal by saying that regulating this industry is like trying to make a silk purse out of a sow’s ear. It gives their business model the colour of legitimacy, and it postpones the sort of serious change that’s needed.
So we said to the Wynne government:
- Abandon your inadequate minimum wage for a living wage; and
- Authorize certain institutions to offer temporary loans of fixed periods at a rates people can pay back.
You can find the full text of our submission on Payday loan companies at
http://www.bgos-ndp.ca/submission-to-ontario-on-payday-loan-companies.html