ACORN Newsletter

Stay current with ACORN news and events by joining our mailing list. You will receive updates in your inbox every month.



Insauga: Mississauga woman facing $12k debt demands bigger crackdown on predatory lenders - ACORN Canada

Insauga: Mississauga woman facing $12k debt demands bigger crackdown on predatory lenders

Posted April 24, 2023

While many lower and middle-income earners who have been forced to deal with loan companies charging sky-high interest rates are breathing a sigh of relief over the federal government’s move to cap borrowing costs, some say that more still needs to be done.

One of those people pushing for greater awareness and change is Marcia Bryan, chairperson for the Cooksville chapter of Peel ACORN, an independent social and economic justice organization comprised in part of low- and moderate-income Mississauga residents.

“In 2019, I had payday loans and it was no issue and I paid them off, but I was introduced to the installment loan, which they said would be better,” Bryan told
“They told me I could refinance and I said ‘okay cool.’ Between 2019 and 2021, [my debt] ballooned up to $12,000.”

Bryan says that when she shared her experience with others, she learned she’s far from alone.
“When you are in financial need, it’s hard. Nobody put a gun to my head to go inside, but they can see you come in, and they see the desperation,” she says, adding that payday loan companies such as MoneyMart, CashMoney and EasyFinancial are common sights in her Hurontario and Dundas neighbourhood.

“They’re all right there. I was taking care of my bills fine, but when this ballooned to $12,000, I was in trouble.”

For years, ACORN has put pressure on the federal government to slash the criminal rate of interest to a more manageable rate and last month, the Liberals announced plans to officially lower the annual percentage rate (APR) from the equivalent of 47 per cent to 35 per cent.
The plan is part of the government’s 2023 budget.

The government also committed to launch consultations to see if it can be further reduced.
Earlier this year, ACORN held a demonstration outside of Mississauga MP Peter Fonseca’s office, demanding the government lower the interest rate for installment loans from 60 per cent to 30 per cent or 20 per cent plus the Bank of Canada rate, whichever is lower.

The organization also wants action to lower associated costs such as fees and insurance. According to ACORN, thousands of low- and moderate-income Canadians rely on predatory lenders because they can’t easily secure loans from larger financial institutions.

ACORN says payday loans (less than $1,500 paid back in two weeks) can boast an annual interest rate of 400-600 per cent, while installment loans can boast an annual interest rate of up to 60 per cent, plus associated charges.

The poverty advocacy group says it saw a 300 per cent increase in the uptake of installment loans between 2016 and 2020. In a survey conducted between November 2021 and January 2022, 40 per cent of respondents told ACORN they took out loans one or two times and 25 percent said they took out loans 10 or more than 10 times.
According to ACORN, respondents said they needed the loans to cover basic expenses such as rent, groceries and car repairs.

Ryan says that while she has been able to get her payments under control and is happy that the government has pledged to reduce the criminal interest rate, she would like to hear more details.

“We’re happy about the 35 per cent, but we don’t know what it includes–insurance, penalties, funds, etc. There’s a big gap in there. I don’t want people to think it’s 35 per cent and it’s still close to 60 per cent because of hidden costs. I want them to be more specific with what that entails,” she says.

Ryan also says she and other advocates would like to see more action on alternative banking systems, such as postal banking, that will allow lower-income residents to access affordable loans.

“Postal banking, anything at all, would be better than these people. They’re legalized loan sharks and the government permitted them,” she says.

Previously, Canada Post offered a MyMoney Loan program in partnership with TD Bank that featured variable interest rates between 11.03 per cent and 21.03 per cent (TD Prime Rate plus 4.33 per cent to TD Prime Rate plus 14.33 per cent) and fixed interest rates from 9.98 per cent to 19.98 per cent.

As of now, the program is not available to new customers.

“I like the 35 per cent, but I’d like to see what it entails. I don’t want surprises,” Ryan says.
Ryan says that without further restrictions, predatory financial institutions will continue to prey on people who are desperate and down on their luck.

“When you’re desperate and you have things coming up against you, you tend to buckle in and do all of this. Now that I’m out of it, I see people going in and I feel sorry for them. There are low to moderate-income families who have been suckered into it. [These places] are just footsteps away from one another. I feel sorry for the families in the area,” she says.

“I wish I could say, ‘Don’t go in there.’”

Going forward, Ryan says ACORN plans to continue advocating for lower rates.

“We’re going to push for lower. Things are getting hard out there. It’s a victory, but we can’t give in right now. We have to put more pressure. We appreciate the 35 per cent, but they have to do better than this.”


Article by Ashely Newport for Insauga