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Payday loan companies prey on the vulnerable: ACORN

BURNABY (NEWS1130) – Protestors in Burnaby are taking a stand against payday lenders they claim are preying on low and moderate income neighbourhoods.

The Association of Community Organizations for Reform Now (ACORN) wants to stop new payday lender sites from setting up shop.

Murray Martin with ACORN wants a provincial government crackdown. “Getting rid of the payday lenders isn’t going to solve the problem, but maybe credit unions or banks could offer payday or micro loans at much lower interest rates.”

He says too many people are relying on these places to make ends meet. “It is really outrageous that our provincial government allows 23 per cent interest per month. The only people that are going to take that are in dire straits.”

NDP Finance Critic Mike Farnworth says the issue is concerning because people get stuck in a cycle of poverty.

“The way it is promoted is that is is an easy way to get quick cash, when in fact it is a very expensive way to get cash and it targets people who are often in reduced economic circumstances,” he argues.

Stan Keyes, the president of the Canadian Payday Loan Association argues the companies provide a responsible service to help customers make informed financial decisions.

“As part of the provincial government regulations, there are posters that are clear in these stores that say you are borrowing a high cost interest product.”

He says if the lender is part of the CPLA, “there are brochures right there on the counters that provide alternatives for them — if they are having credit problems, then they should look up a not-for-profit credit counselling agency to assist them with their financial well-being.”

Keyes also maintains the assumption that these lenders are only seen in low to moderate income neighbourhoods is false. “I invite everyone to visit the CPLA site. The facts are there for everyone.”

He claims the companies are heavily regulated and people are informed about the high interest loans they are taking.