New payday lending centers that promise short term loans and instant cash are now prohibited from being opened in Maple Ridge, BC.
There are currently six such businesses in the city, but the city council recently passed a bylaw prohibiting any new businesses from setting up.
Councilor Tyler Shymkiw, who introduced the settlement, says payday lenders trap users in a cycle of debt and poverty as many cap interest rates at 23% over a two-week loan period, or 600% per year.
“These loans are just not repayable for a lot of people,” he said. The first editionit’s Rick Cluff.
“And what tends to happen – that’s why having a density of them is such a problem – they take out loans from one store to pay off another, to pay off another.”
Shymkiw, who was on the board of a local food bank, says exorbitant prices force users to end up at the food bank or other similar services.
Payday loans offer alternatives
Canadian Payday Loans Association president Stan Keyes says there is a demand for small, short-term loans as most banks and credit unions don’t offer 200 or 300 loans. $ refundable within a few weeks.
“Payday loans are often a smart option for clients,” Keyes said.
“Payday loans are cheaper than a series of car loan overdrafts or defaults, better deal than having the electricity or the heat or the phone turned off later to pay for it. turn them back on. “
Shymkiw points out that some financial institutions such as Vancity are now offering small, short-term loans at a much lower interest rate. Additionally, those in need can also turn to community initiatives such as emergency rent arrangements rather than resorting to a payday loan store.
To hear the full story, listen to the audio titled: More New Payday Loan Centers in Maple Ridge