Inside Toronto: Toronto City Council passes a motion to protect borrowers from lending businesses

Posted April 6, 2016

A motion to limit the number of pay day lenders that can operate in Toronto passed unanimously at Toronto City Council’s April 1 meeting.
“We are very excited that our motion passed the first hurdle at city council,” ACORN spokesperson Natalie Hundt told The Villager in an email statement. “City staff now have been tasked with developing a bylaw and some options around imposing minimum distances on predatory lenders.”
ACORN (Association of Community Organizations for Reform Now) Toronto’s motion also calls for other levels of government to do more to protect borrowers from predatory lending practices.
ACORN has been working alongside York South-Weston Councillor Frances Nunziata and her colleague Toronto Centre-Rosedale Councillor Kristen Wong-Tam, who tabled the motion called ‘Establishing Regulations and Minimum Separation Distances for Predatory Lenders.’
“Everyone supported it which means all the councillors are experiencing issues with pay day lenders. It’s a city-wide issue,” Nunziata said of the motion.
The issue has been a concern of Nunziata’s for several years and one she has been working to combat because these companies target the most vulnerable, she said.
“Right now, they are not even licensed,” she added. “I’m pleased that the City of Toronto is taking a lead on this.”
ACORN is “proud” its proposal to have the city use its zoning powers to limit predatory lending in the city was approved by city council on Friday.
In Nunziata’s Ward 11, residents have been concerned about the number of pay day loan centres that are opening. These operations lend their customers small amounts of money at high interest rates with the agreement the loan will be repaid when the borrower receives his or her next pay cheque. These such businesses include cash-for-gold and rent-to-own furniture stores, among others.
The motion includes a recommendation to establish a Payday Lenders Minimum Distance bylaw that requires any new payday lenders, installment lenders, title lenders, cheque-cashing operations and cash-for-gold operations to be at least 400 metres away from existing lenders; and city council request the provincial government cap the annual rate of interest for all lenders to 35 per cent.
Last month, ACORN hosted a fair banking forum in Weston with more than 80 people in attendance at the Weston King Neighbourhood Centre, on Weston Road at King Street. It will be working with city staff to develop the bylaw while continuing to campaign city council to ensure the bylaw is passed.
“We will be working with city staff to develop the by-law,” Hundt said. “We will also continue to campaign city council to ensure that this bylaw passed.”
The Toronto chapter of ACORN was established in 2004 when a group of tenants in Weston-Mount Dennis took their landlord to task winning $250,000 in rent abatements.
Article by Lisa Rainford for Inside Toronto