Councilors to vote on crackdown on payday loans
Legal staff have requested meetings with the city’s 10 current payday loan operators. Nobody came
Sault Ste. Marie would be allowed to deny licenses to payday lending establishments owned by convicted thieves and fraudsters under a bylaw to be considered next week by city council.
The proposed regulation also limits the number of payday lending establishments in the city to 10, imposing an annual license fee of $ 1,000 and many other restrictions.
“The current number of operators in the city is estimated at around 10,” said Jeffrey King of the city’s legal department.
“We have no real way of confirming the number as they are currently treated as offices under the city’s zoning by-law,” King said in a report to Mayor Provenzano and councilors. “The greatest concentration is on Great Northern Road.”
King says the city has tried to contact the affected businesses.
“However, a successful meeting never took place or stakeholders did not attend.”
In any case, the city has no obligation to consult with the companies involved in this case, King said.
The crackdown on payday loans was first proposed last year by the Ward 3 Coun. Matthew Shoemaker and then-advisor Steve Butland.
It would also require local payday loan operators to prominently advertise the cost of borrowing and provide borrowers with a city-approved credit counseling brochure.
The intent of the proposed settlement is to “better educate lenders that payday loans are the most expensive form of consumer loan in Ontario,” King said.
Penalties of up to $ 5,000 are included in the proposed settlement, and separate violations are deemed to have occurred on each day that the violation continues.
If passed on Monday, the regulation would take effect immediately, but affected establishments will have six months to comply with all requirements.
The by-law allows city council to consider increasing the limit to 10 cases if more permit applications are received.
Each business should display a poster with the words “our annual interest rate” in 144 point type, along with a comparison to the annual consumer rate of chartered banks.
Sault Ste. Marie will be authorized to recommend that a permit be refused to any applicant found guilty of fraud or theft, a violation of the Payday Loans Act or a payday loan settlement in another municipality.
In a totally, completely, totally independent development, advice will be requested by the councils of Ward 1. Sandra Hollingsworth and Paul Christian to enable residents to pay their first quarter tax bills with their credit cards at 23% off interest.
Monday’s city council meeting will be broadcast live on SooToday starting at 4:30 p.m.