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Regulations could be coming to payday loan establishments in Kitchener

City council will make a final decision at the end of June
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The Finance and Corporate Services Committee has agreed to regulate the number and location of payday loan businesses.

There are currently 18 businesses open in the City of Kitchener, but staff has suggested setting the limit to ten.

This means all 18 can stay open for now, but no new establishments can open until the number drops below ten.

Doug Hoyes, Co-founder of Hoyes Michalos - Licensed Insolvency Trustees, says limiting the number of locations won't discourage people from going elsewhere.

"Cambridge isn't very far away, Guelph isn't very far away, this is not a big deal. Limiting the locations in Kitchener, I think, is somewhat pointless. But more importantly than that, you can get payday loans online now." he told The Mike Farwell Show on 570 NEWS.

"So why is someone so desperate? Well, it is because they do not have income sufficient to cover their expenses."

Hoyes goes on to advocate for living wage businesses.

"My clients don't have a debt problem, they have an income problem. My typical client has average income much below the median income in Ontario. For all the reasons we just talked about, sporadic employment, job loss, medical issues, whatever. So you have lower income than what you need to survive, so you use debt to survive."

"If you want to start addressing the income problem then what we need to do is start paying people a living wage, not just a minimum wage."

The regulations would affect the location of businesses as well. New payday loan shops would not be allowed to set up within 150 metres of another payday loan shop, a casino or other gambling establishment, or a counselling service for gambling and addiction.

City council will meet again on June 24 for the final vote.




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