Payday Loan Outlets Targeted By Surrey Settlement Proposal
Surrey City Council is looking for ways to prevent loan companies from clustering around the low-income neighborhoods of Newton, Whalley and Guildford.
Companies like Money Mart and Cash Store offer payday loans to people who do not qualify for bank loans, but customers pay high interest rates.
The largest cluster is around King George Boulevard. between 104th Avenue and 112th Avenue where there are 14 points of sale.
Advisor Tom Gill says interest rates can reach 23% per month on these loans, and people can get into financial trouble.
“One of the problems we have is just access – the ability for someone to be able to go to one of these many institutions just to pay off a pre-existing loan somewhere else.”
In order to tackle the problem, the city is considering a bylaw that would ban businesses from opening within 400 meters of existing stores.
As critics accuse the industry of targeting low-income areas, the president of the Canadian Payday Loans Association, Stan Keyes, says the outlets are there to meet demand.
“Payday loan outlets are typically located along major thoroughfares, like any other retail service. “
The proposed settlement will be referred to council at a meeting in the near future.