Payday loan outlets targeted by Surrey bylaw proposal
Proposed law would ban new stories from opening with 400m of existing outlets
Surrey City Council is looking for ways to stop loan companies from clustering around low-income neighbourhoods in Newton, Whalley and Guildford.
Businesses like Money Mart and the Cash Store offer so-called payday loans to people who don't qualify for loans from banks, but customers are charged high interest rates.
The biggest cluster is around King George Blvd. between 104th Avenue and 112th Avenue where there are 14 outlets.
Councillor Tom Gill says interest rates can be up to 23 percent per month on those loans, and people can end up in financial trouble.
"One of the problems that we do have is just access — the ability for one to be able to go to one of these many institutions just to pay off a pre-existing loan at another location."
In order to tackle the issue, the city is looking at a bylaw that would ban the businesses from opening within 400 metres of existing stores.
While critics accuse the industry of targeting low-income areas, Canadian Payday Loan Association president Stan Keyes says outlets are there to respond to demand.
"The payday loan outlets are generally located along the main traffic thoroughfares, just as any other retail service."
The proposed bylaw will go back to council at a meeting in the near future.
With files from Jesse Johnston