City Council suggests education before regulation when it comes to dealing with payday loan providers in Windsor.
A report, which will be presented to City Council Monday, is an answer to a question Ward 3 councilman Rino Bortolin asked about potential options for licensing the businesses.
A payday loan is a quick, short-term loan with high fees, typically loans to cover a cash shortage are usually made until the next paycheck.
Payday loans have been identified as the most expensive form of consumer loan in Ontario, making them difficult to pay off in full by the next paycheck, often affecting low-income individuals.
Bortolin says they want to keep as much money in people’s pockets as possible.
“There will always be a subset of people who might need these services,” he says. “Rather than restricting services, we want to make sure people know their options.”
The administration recommends a multi-pronged approach that includes a committee with community representatives from social services and settlement agencies to get a full picture of Windsor’s use of payday loans, reaching out to financial institutions to explore payday loan alternatives, and educational materials to explain develops options for those seeking financial assistance.
The City Council may consider restricting payday loan advertising to properties owned by the City of Windsor, including the City Board, Boards or Commissions.
Ward 3 councilman Rino Bortolin says that licensing payday loan services would not meet people’s need for the service even if they reduced the number of options available.
“They would just walk to the nearest branch because there weren’t any other options or because they didn’t know the options available,” he says. “I think that approach would be a good place to start, and I think it would be a good place to start on how we might get there by reaching out to these credit unions and other financial institutions to work on an awareness campaign.”
According to the administration’s report, Kingston, Hamilton, Kitchener, Barrie, Ottawa and Brantford have restrictions on how many payday loan facilities are allowed in a given area.
Bortolin believes that there is often a knee-jerk reaction to just approving or controlling something, but that won’t necessarily change the situation in this case.
“I think a more thoughtful approach if we work with our social services because that’s where a lot of these checks come from, and we share that education and we’re spreading that information, and even when people come in to pick up their check at City Hall in the 400 building.” just to have this face-to-face conversation,” he adds.
According to the Department for Government and Consumer Services, as of September 14, 2020, 17 PLEs were licensed under the Payday Loan Act in Windsor.
Five PLEs were listed in District 3, while four payday lending institutions were identified in District 8.
Windsor City Council meets at 4pm on Monday.