The city government suggests education over regulation when it comes to dealing with payday loan providers in Windsor.
A report presented to City Council on Monday is in response to a question raised by Ward 3 Councilor Rino Bortolin about potential options regarding business licensing.
A payday loan is a quick, short-term loan with high fees, usually loans to cover a lack of cash until the next paycheck.
Payday loans have been identified as the costliest form of consumer lending in Ontario, making it difficult to repay in full by the next paycheque, often impacting low-income people.
Bortolin says they want to keep as much money in people’s pockets as possible.
“There will always be a subset of people who might need these services,” he says. “Instead of restricting services, we want to make sure people know their options.”
The administration recommends a multi-pronged approach that includes a committee comprised of community representatives from social services and settlement agencies to gather a full picture of payday loan usage in Windsor, reaching out to financial institutions to explore payday loan alternatives and developing educational materials to explain options to those seeking financial support.
City Council could consider restricting payday loan advertising on City of Windsor-owned properties, including city agencies, boards or commissions.
Ward 3 Councilman Rino Bortolin says licensing payday loan services would not address people’s need for the service, even if it reduces the number of options available.
“They would just walk to the next outlet because there are no other options or because they are unaware of the options available,” he says. “I think that approach would be a good start and I think reaching out to these credit unions and other financial institutions to work on an education campaign would be a good start in terms of how we could do that.”
According to the administration’s report, Kingston, Hamilton, Kitchener, Barrie, Ottawa and Brantford have restrictions in place on the number of payday loan establishments allowed in a given area.
Bortolin thinks there’s often a knee-jerk reaction when something comes along to just allow it or control it, but that won’t necessarily change the situation in this case.
“I think a more thoughtful approach where we work with our social service agencies, because that’s where a lot of these checks come from, and share that education and spread that information, and even when people come to pick up their check at City Hall in Building 400, just to have this face-to-face conversation,” he adds.
According to the Ministry of Government and Consumer Services, as of September 14, 2020, there were 17 PLEs authorized under the Payday Loans Act in Windsor.
Ward 3 had five PLEs listed, while four payday lending establishments were identified in Ward 8.
Windsor City Council meets at 4 p.m. Monday.