Friday, 8 August 2008

It's time government reined in payday lenders

Not the first time I have higlighted the yellow storefront crowd.
But, "In the common parlance," the [Manitoba Public Utility] board said, "payday lenders could be considered loan sharks, albeit minus the intimidation factor associated with the definition. How else would one describe lenders charging rates ... 100 times and more than that of banks and credit unions, to borrowers reportedly unable to obtain credit elsewhere?"
The answer seems to be that it is accepted that their costs are higher than banks and credit unions (which is why they won't touch these kind of loans) AND
"We need to rein in these guys, but not to the point where we drive these services into the hands of organized crime."
Which is the real problem.

So only Nova Scotia has set maximum rates - and BC is looking at it but not doing much other than consulting the industry. Not, so far as anyone knows, actually setting its own house in order, since it is often government's policies towards payments to the poor that creates the need for such loans in the first place.

No comments: