HAMILTON – An Ontario city is looking at instituting new regulations in an effort to gain greater control on payday loan companies.
Tom Cooper, the director of Hamilton Roundtable for Poverty Reduction, has worked with city officials on the proposal and says it’s a three pronged approach.
Cooper says a $750 licensing fee would be used to hire an inspector, the companies would be required to put up posters outlining the full the interest rates on all loans and make sure each customer is given a brochure on credit counselling.
Cooper says many customers don’t realize that paying $21 on a $100 short term loan works out to an annual interest rate of close to 550 per cent.
He says it means many customers end up getting into a viscous cycle of requiring the payday loans once or twice a month.
Hamilton councillors are to look at the proposal on Tuesday.