Concern in Kitchener over payday loans
Posted Jan 22, 2010 12:50:19 PM.
This article is more than 5 years old.
A Kitchener researcher hopes to find an alternative to payday loan companies. Sarah Marsh of the Centre for Community Based Research says the payday loan companies contribute to the cycle of poverty because borrowers go further into debt trying to pay off exorbitant interest rates. Marsh tells 570’s Jeff Allan Show that those interest rates can be as high as 766% on a $300 loan.
Marsh says payday loan companies were actually in contravention of the Criminal Code of Canada up until two years ago. The law states that it’s illegal to charge more than 60% interest, according to Marsh. She began her research after noticing a high number of payday loan companies popping up in Kitchener. Marsh calls that concerning because the companies are not regulated in the same way banks are and there’s nothing stopping someone from borrowing money from one payday loan company to pay off their debt at another. Marsh calls this a loan “rollover” which is not allowed in Ontario. While some municipalities limit the number of payday loan companies allowed to operate in their city, Marsh says Kitchener has no such policy in place.
The Centre for Community Based Research is continuing to gather survey responses from anyone who has had experience with a payday loan company. You can participate in that survey by clicking here.
