Hamilton Spectator: Hamilton ACORN protests high-interest loans
Posted December 16, 2021
Posted December 16, 2021
When money is tight at the end of the month, Liz Scott is forced to make some difficult decisions.
But Scott, who relies on Ontario Disability Support Program payments, avoids the temptation of high-interest loans at all cost.
“Especially now during this pandemic, I used to spend between $300 and $400 on food a month,” she said. “Now, I’ll starve for the last week or last two weeks, so I don’t have to borrow from these lenders.”
Scott, 46, was part of a Hamilton ACORN day of action to raise awareness of high-interest installment and payday loans.
Hamilton ACORN, an advocacy group for low- and moderate-income people, held an information rally with about a dozen participants on Dec. 14 in front of a payday loan outlet on Centennial Parkway.
For those caught up in a web of high-interest loans, it can be an endless cycle, said Scott.
“It’s spending next month’s money this month,” she added.
Hamilton ACORN member Teddianne Beagan said payday and installment loans can quickly spiral out of control.
“It’s a vicious circle, and once you start with one, you most likely will end up with a second loan to pay the first one, then a third, fourth, and so on. You get caught in it and it’s so difficult to get out of it,” Beagan said.
The ACORN campaign, which included a national day of action in 10 Canadian cities Dec. 14, called on the federal government to “criminalize” high interest rates and fund non-predatory banking alternatives for low-to-moderate income earners.
ACORN is calling for action from the federal government to lower the maximum interest rates on installment loans from 60 to 30 per cent and to force lenders to include all charges and fees associated with the loan in the interest rate.
A 60 per cent interest rate on installment loans is the current maximum permitted under Canada’s Criminal Code.
Hamilton ACORN also wants the federal government to create a fair credit benefit to give low-income earners access to affordable credit options in case of emergencies, to support postal banking in all cities and force banks to lower non-sufficient funds fees from $45 to $10.
Bill Mahoney, a member of United Steelworkers Local 1005, was on hand to offer his support at the Hamilton rally. He said many young people might not understand the implications of compound interest when they take out a loan.
“I’m proud to be out here protesting this,” Mahoney said.
Article by Mike Pearson for the Hamilton Spectator