Payday loan charges have been lowered in B.C. for cheque-cashing businesses.
That is a good thing, particularly for Chilliwack’s most vulnerable, says Coun. Sue Attrill.
Provincial reps announced maximum loan charges will dip from 23 per cent down to 17 per cent.
“It’s really good news,” Attrill said. “It’s still too high but it’s a huge step forward.
“It speaks to the challenges communities are facing around poverty and drug abuse.”
More people are cashing cheques and borrowing for day-to-day needs.
Attrill said Chilliwack took the issue to UBCM, with other municipalities who have grown concerned about some industry practices.
“It’s become top of mind for many communities. It really pushes vulnerable people into situations where they’re living below the poverty level.”
Chilliwack council, out of the same concern, voted in 2015 to ask the federal government to ratchet down the maximum interest rate charged on short-term loans.
The issue mentioned in council chambers at the time was predatory business practices of some outfits who offer cheque-cashing in return for very high rates and fees.
Of course these businesses are legitimate, said the councillor, but they viewed it as a public safety, and healthier community issue for the municipality, and so the provincial move to cap the charges is a welcome one.
“These places are popping up all over town,” said Coun. Attrill at the time, about payday loan outlets, as the councillor who moved the resolution.
The new rules that took effect Jan. 1 lower the maximum charge from $23, including all fees. The regulation covers short-term loans up to $1,500 for a term of 62 days or less.
The B.C. government began tightening regulations on payday lenders in 2009, when they limited charges to 23 per cent of the loan, and required lenders to post signs reminding customers they were paying an annualized interest rate of up to 600 per cent.
Public Safety Minister Mike Morris said the new 17 per cent rate is the second lowest in Canada.
–with files from Tom Fletcher, Black Press
