Halifax Payday lenders throughout out North America are both under attack and organizing fiercely to resist effective regulation.
In the United States, Republican lawmakers nationally and in some states are being mobilized by payday lenders to pushback against the Consumer Financial Protection Bureau (CFPB) efforts to rollout regulations establishing minimum standards for payday lending. What do they want? They want to keep the regulations, such as they are, remaining a patchwork quilt from state to state allowing them to slip and slide from border to border, and try to jump over the obstacles online. The CFPB insists they are trying to establish a “floor,” while the industry wants the floor to be whatever they can get away with in various states.
ACORN Canada has been fighting payday lenders for over a decade, but they are slippery. The Conservative government slipped the noose federally and pushed the regulations down to the provincial or state level allowing the rules to be better in a Manitoba and worse in a Nova Scotia.
In British Columbia, ACORN is promoting a 5-point “model” program that would cap interest rates at 17%, similar to the Manitoba standard, bar on-line payday lending, create and maintain a unified database that would limit the number of payday loans per customer to prevent pyramiding of the loans across multiple lenders, extending the payback period for loans, and finally lowering the level of allowable loans to no more than 25% of a customer’s annual income rather than the current 50% of the income. In Nova Scotia payday lending is actually regulated by the same board that regulates utilities like gas and electric, which makes you worry about how serious they really are about any regulations at all. ACORN though is pushing for similar limits with the board.
In Ontario, Toronto ACORN is trying to limit the locations of payday lenders using “minimum distance separations” law similar to the gold standard won in Burnaby, a working suburb abutting Vancouver in British Columbia. In Burnaby no payday lending establishments can be opened within 400 meters of any school, church, or, most importantly, any residential area. To move forward on minimum distance ordinances or bylaws, the province of Ontario has to pass enabling legislation allowing any city, perhaps of any size, to enact such measures, which appears likely by no later this fall. Nationally, ACORN has entered an alliance with the Canadian Union of Postal Workers (CUPW) to reestablish postal banking that would complete with and attempt to replace payday lenders. ACORN has launched a Fair Banking Campaign with postal banking as one demand.
The lack of information on deposits and loans correlated to census data is also unavailable in Canada, creating increasing support for a campaign to create a Community Reinvestment and disclosure regime similar to the US program. Information available in the United Kingdom is starting to be available on voluntary submissions by the banks, but not correlated to census data. There is also no regulations on online lending in Canada which is a major loophole as well!
Country to country this is still a hard, hard fight with the predators continuing to run wild.