Kitchener committee votes to cap number of payday loan businesses
Changes to go to city council for final vote on June 24
Kitchener is one step closer to capping the number of payday loan establishments allowed to operate in the city.
On Monday, the finance and corporate services committee voted unanimously in favour of new regulations that would limit the number and location of payday loan businesses.
"Basically it's just to better align with provincial legislation, to reduce the concentration of the locations of where payday lenders are and to see a reduction ultimately in the number of payday loan establishments over time," said Ward 10 Coun. Sarah Marsh in an interview on CBC Kitchener-Waterloo's The Morning Edition.
There are currently 18 payday loan locations across the city. City staff have recommended capping the number at 10 through attrition.
That means all 18 businesses would be allowed to stay open for now, but if one shuts down, a new business would not be allowed to take its place until there are fewer than 10.
The regulations would also prevent a new payday loan business from being located within 150 meters of another payday loan business, a gambling establishment or a counselling service for gambling and addiction.
Feedback from public consultations was largely in favour of imposing restrictions on the industry, according to a report from city staff, with many people saying payday loans take advantage of vulnerable people and add to a cycle of poverty.
Marsh said, in her opinion, payday loans are "predatory."
"I feel it is our responsibility to play a role in consumer protection," Marsh said of the city, but added that other levels of government also play a role.
"We do have a Payday Loans Act in Ontario and that is what we are going by. They did open it up to municipalities to license payday loans in a particular way, so we're just following that lead from the province."
Marsh noted there is a high concentration of payday loan businesses in her ward in downtown Kitchener. She said the new regulations have taken those business owners into account.
"If there's pushback, you know I'm willing to have that conversation," she said.
The new regulations won't be in place until they are ratified by city council. That vote is expected on June 24.