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Payday lenders in the business of fleecing the poor
Re: City eyes no-go zones for payday loans (NewsLeader, Feb. 28)
Thank you to Acorn for scrutinizing the shady payday loan industry, and to Coun. Colleen Jordan for exploring ways the City of Burnaby can limit these vultures.
I think the fact the provincial government allows loans up to 23 per cent per month is something few people are aware of.
On a compounded annual basis that means that it is legal in B.C. to charge 1100 per cent interest on loans. To put this in perspective, the prime lending charged by banks is about 3 per cent.
So while middle class and wealthy people in B.C. take out loans at little expense, our government lets payday lenders charge the working poor 30-40 times the rate.
It’s not surprising there are so many payday loan outlets, when fleecing those who can least afford it is condoned by the provincial and federal governments.