Not applicable
Climate Change Adaptation:
Not applicable
Consultations:
Community Development & Health Services – Stephen Lynn, Acting Manager of
Social Policy and Planning
Planning – Adam Szymczak, Senior Planner
Licensing – Craig Robertson, Supervisor of Licensing
Conclusion
For the majority of payday loan consumers, one common indicator is the lack of sufficient income. The lack of income to cover basic necessities requires help from someone or somewhere else. However, consumers without sufficient income, good credit or access to traditional financial services turn to the most expensive option, a payday loan, in a time of need.
Data shows PLE’s currently fill a gap in the financial market and continue to experience increased demand. Although municipalities have new tools to restrict where PLE’s can locate, changes to licensing or zoning by-laws should be seen as one action to protect financially vulnerable residents at risk of getting trapped in a cycle of debt, stress and physical and mental hardship. Stable and adequate household income, strengthening partnerships with community agencies to improve financial literacy and the promotion of local, more affordable financial alternatives could help stabilize residents seeking a short-term loan, rather than trapped in a cycle of debt.
If Council is resolved to regulate payday loan establishments, as to location or number or both, it could do so through amendments to its zoning by-law or to its 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. All other municipalities that have regulated payday loan establishments, of which we are aware, have done so through their licensing regimes. Therefore, if Council resolves to create a maximum number of PLE’s within e ach ward and regulate the location, we suggest it be done in its licensing by-law.
The City cannot regulate away the existing payday loan establishments. Any existing establishment will be grandfathered and allowed to operate even if the City establishes a maximum number of establishments for the entire City at less than the total number existing in the City as of the date a by-law is passed. However the City can systematically reduce the number of establishments by licensing those currently in