Hamilton votes to restrict new payday loan places to no more than 15

Payday loan associations say they're providing a necessary service. Opponents say they make people's lives miserable.

Payday loan associations say they're providing a necessary service

City councillors have voted to limit the number of new payday loan places to no more than 15. They'll cast a final vote Feb. 28. (Samantha Craggs/CBC)

Hamilton became one of the first cities in Ontario Tuesday to limit the number of payday loan lenders in its boundaries.

City councillors voted to allow no more than 15 such businesses, or one per ward. It may even restrict them altogether downtown and around Flamboro Downs.

They will stop at nothing to exploit people.-Tom Cooper, Hamilton Roundtable for Poverty Reduction

The city's existing 30 payday loan places would remain, grandfathered in under the new bylaw. And city council still has to ratify this decision on Feb. 28.

But Matthew Green, Ward 3 councillor, says he hopes this encourages other cities to "squeeze out (payday lenders) from the grassroots up."

Green said he's seen "the pressure that happens when (users) default on these products.

"The vicious nature of the collection companies. The impact that it has on people with the relentless phone calls. The calling of family members. The pressure it puts on people to pay these things back when they never had a chance to pay them in the first place."

The city is passing the bylaw after the province passed Bill 59. Under the act, the province is allowing local municipalities to regulate the location and number of payday loan establishments. That came into effect Jan. 1.

Our customers send us Christmas cards.-  Patrick Mohan, Independent Payday Loan Association of Canada

Two payday loan associations told councillors the industry is misunderstood. They provide loans when the banks won't, often for emergency purposes such as car payments, said Patrick Mohan, president and co-founder of Independent Payday Loan Association of Canada.

"Our customers send us Christmas cards," he said.

But Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction, said the deceptive advertising and annual interest rates as high as 391 per cent rope people in and cost them dearly.

In 2014, he said, local payday loan outlets had a program to buy Christmas gift cards from people for 50 cents on the dollar.

"It provided us with a lot of insight into this industry," Cooper said. "They will stop at nothing to exploit people."


Samantha Craggs is journalist based in Windsor, Ont. She is executive producer of CBC Windsor and previously worked as a reporter and producer in Hamilton, specializing in politics and city hall. Follow her on Twitter at @SamCraggsCBC, or email her at samantha.craggs@cbc.ca


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?