A B.C. community group took to the streets on Tuesday, calling on the federal government to crack down on what they say are “predatory” lending companies charging astronomical interest rates.
Members of the group Acorn Canada demonstrated in front of a Easy Financial branch in Surrey before taking their message to MP Randeep Sarai’s office.
The group is calling on the federal government to limit the interest rates that payday and instalment lenders can charge at 30 per cent, and for any fees to be lumped into that figure.
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Currently they’re allowed to charge up to 60 per cent interest.
“Our members end up, for whatever a reason — an accident, or they don’t get COVID or whatever — they end up not making bills for one month,” Acorn member Murray Martin said, describing the current system as “criminal.”
“They come into one of these places not knowing the cycle of debt they’re going to get into, and then five, 10 years later their debt just keeps mounting because they’re not even able to pay off the fees and the interest, nevertheless the principal.”
Outside the Easy Financial branch, an employee told Global News their interest rate was 46 per cent annually, and that customers shouldn’t be concerned because the information is on the first page of the contract they must sign.
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But the people who rely on the loans say it isn’t that simple.
Single mother Janna Martin told Global News she took out one payday loan, which snowballed into multiple, with interest rates topping 50 per cent.
“I took out those loans because I had no choice, I needed to feed my children,” she said.
“You start the vicious cycle of having to do it the next month because you’re so low on funds.”
In October, the federal government held consultations on limiting interest rates at such alternative lenders.
Acorn said they’ve heard nothing from the government since then, and are hoping to light a fire under MPs.
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“If you are desperate you will do anything to feed your family, right? And rents are so high that people will pay rent to have shelter. And then they won’t have money for anything else. So they’re willing to do anything,” Acorn Burnaby chair Lori Pederson said.
In a statement to Global News, the federal Department of Finance said “the government is committed to cracking down on predatory lenders,” adding it was “in the process of reviewing the submission” collected last fall.
Martin said the government needs to act fast, as Canadians are increasingly squeezed by the rising cost of living.
“Any sort of regulation and lower interest rates is going to help people who have these loans right now,” he said.
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