Telegraph Journal: ACORN calling on feds to regulate ‘predatory lending’ sector
Posted January 25, 2023
Members of New Brunswick ACORN took part in a cross-country action calling upon the government to regulate the payday loan system.
Members of New Brunswick ACORN are calling on the federal government to take action against lending companies that charge exorbitant rates of interest.
On Tuesday, six members of the social-justice group protested outside Fairstone Financial on Main Street in Moncton. It was one of several actions by ACORN Canada across the country in an effort to push the government to regulate the payday loan sector.
In a news release, ACORN said that “due to failure of the banks,” many Canadians are forced to go to private lenders such as Easy Financial, Cash Money and Money Mart, “that are making millions of dollars on the backs of low- and moderate-income people.”
The Times & Transcript has requested comment from Fairstone Financial, Easy Financial and the Canadian Consumer Finance Association, which represents Cash Money and Money Mart, and is awaiting responses.
Peter Jongeneelen, co-chair of the local ACORN chapter, led the Moncton protest. He described his experience borrowing from a lender as “a nightmare,” and said that for New Brunswickers living in rural areas without banks or those with bad credit, a high-interest loan from this kind of lender may be their only option.
He said the group participated in the government’s consultation on fighting predatory lending, an action the feds took as part of the 2021 budget. ACORN members sent in more than 600 submissions to the federal government that the group said highlighted their experiences with a predatory lender.
“Feedback received will be considered alongside the analysis our economists have been doing to help inform decisions on the criminal rate of interest and provision of high-cost installment loans in Canada,” according to the Department of Finance’s webpage on the consultation.
While the consultation has concluded, Jongeneelen said the government has gone silent when it comes to what action will be taken. Now, he said they want answers from the feds about what actions they are going to take.
The group has made several recommendations, calling on the government to lower the criminal rate of interest from 60 per cent to 30 or 20 per cent; require all fees and costs associated with a loan to be included in the interest rate; and make enforcing violations accessible to borrowers.
They’re also asking the government to create a federally funded Fair Credit Benefit so that all low-income people have access to low-cost credit options in case of emergency and to support fair lending alternatives, such as postal banking, in all cities.
The Times & Transcript has requested comment from the Department of Finance Canada and is awaiting a response.
More to come…
Written by Payge Woodard for Telegraph Journal