Proposed Ontario Payday Loan Rate Astronomically High, Will Hurt Most Vulnerable Consumers in Economic Downturn



    TORONTO, Feb. 6 /CNW/ - The Public Interest Advocacy Centre (PIAC) today
condemned the Ontario Maximum Total Cost of Borrowing Advisory Board's
proposed payday lending rate as "astronomically high". The report, released
today, "Capping Borrowing Costs - A Balanced Approach to Payday Loans in
Ontario" is anything but balanced and is instead a gift to payday lenders at
the expense of Ontario's most vulnerable consumers - just as Ontario enters
what may be its largest economic downturn, said the consumer group.
    "This report proposes not only burying Ontario's most needy and
vulnerable consumers under new mounds of debt but has picked out the most
expensive casket for them" said John Lawford, Counsel at PIAC. "We urge the
Ontario Cabinet and the Minister of Small Business and Entrepreneurship to
reject this astronomically high proposed lending rate. Ontario consumers are
feeling the economic downturn in record numbers and if they turn to payday
loans at this rate they will never recover."
    Lawford noted that the report appeared more concerned with the
profitability of the industry than the needs of people in Ontario that feel
forced to seek a payday loan. "A $300 loan at this rate would cost $63 and if
it were payable in 10 days, that would be an annual percentage rate of over
766%." Under PIAC and Canada Without Poverty's (formerly National Anti-Poverty
Organization) submission to the Board, which also left a fair margin for such
lenders to operate profitably, such a loan would cost about $28.

    To review the joint Canada Without Poverty and Public Interest Advocacy
Centre submission to the Board please visit:

    http://www.piac.ca/PIAC_NAPO_Payday_Loan_Rate_Comments_FINAL.pdf





For further information:

For further information: John Lawford, Counsel, Public Interest Advocacy
Centre, ONE Nicholas Street, Suite 1204, Ottawa, ON, K1N 7B7, (613) 562-4002 x
25 (Tel), (613) 562-0007 (Fax)

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PUBLIC INTEREST ADVOCACY CENTRE

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