households to provide information about alternative lending options. For example, a financial institution in Windsor launched a payday loan alternative in 2016.

This alternative has been cited as an example of a promising affordable alternative to expensive payday loans that other financial institutions could use as a model (Dijkema, 2019). However, a challenge for payday loan alternatives is the difficulty to effectively market its availability to prospective low and moderate-income clients (Dijkema, 2018).

Greater collaboration and information sharing amongst community partners could improve awareness of alternative financial options. Local data on payday loans usage and habits is not readily available. In order to provide a more complete picture of payday loan usage in Windsor, administration could conduct additional research with its existing community partners to better understand the opportunities and challenges associated with the short-term loan market in Windsor.

Although better payday alternative programs may help some with a time sensitive influx of cash to address an immediate need, these programs cannot be actively promoted by the Ontario Works Department to clients using the Reloadable Payment Cards.

Options

We set out several options below. Before settling on any one option or combination of options, we suggest that Council needs to ask whether there is a problem with PL E’s in the City that requires municipal regulation and, if so, what is the problem and how should it be addressed.

Regulatory Options for Payday Loan Establishments: Blanket, Targeted and Hybrid Approach

Should Council decide to regulate PLE’s, as to loc ation or the permitted number, it could do so through amendments to its zoning by-law or licensing by-law. Zoning amendments to regulate establishments would involve a protracted process. The same result can be achieved expeditiously by amending the licensing by-law. Council has the authority to set a maximum number of payday loan establishments and prescribe where they are permitted to operate.

Blanket Approach

In a blanket approach, municipalities can establish a maximum number of payday loan establishments for the entire city. However, the legislation does not allow the City to regulate away the existing 17 PLE’s. Instead, the existing lenders would be grandfathered and permitted to operate even if the maximum number of establishments permitted is set at less than the current number.

The City can also establish a maximum number of PLE’s by ward. Some municipalities in Ontario have limited the maximum number of PLE’s to one or two per ward (however, the existing grandfathered PLE’s outnumber the new limit). Implementing a blanket approach by restricting the number of PLE’s by ward or city may lead to negative