The city is targeting new restrictions on payday loan companies
The report to the full committee recommends the distance between businesses, schools and public parks
To curb the proliferation of payday loan businesses in a given area and protect “economically vulnerable” residents, city officials recommend new rules for the Guelph industry.
If the city council introduces an annual licensing program as proposed, payday loan companies will not be allowed to establish businesses within a kilometer of each other or within 150 meters of a school or public park.
“Limiting where payday loan companies can operate and restricting the pooling of facilities will help protect economically vulnerable populations in some ways,” says one employee report Heading to the September 7th Committee of the Council of the entire meeting for discussion.
“Payday loans can be beneficial when used as directed; to quickly lend a small amount of credit for a short period of time to borrowers who are not eligible for other types of credit.
“However, this type of short-term loan usually has high fees that make it a very expensive way to borrow money.”
The committee’s entire public session begins at 2 p.m. and is broadcast live at guelf.ca/live.
Whatever the Council decides during this meeting will be referred to the Council meeting on September 27th for a formal decision.
Staff recommend that the new rules, if approved, go into effect on January 1st. However, existing payday loan companies are allowed to continue operating until they change hands or the location is sold. Then approval requirements come into play.
In 2018, the state government gave the municipalities the opportunity to limit the location and amount of payday loan transactions.
“An annual license renewal process ensures that there is current and updated information on the location of each payday loan facility, which ensures continuous enforcement over time,” the report said.
The spacing requirements proposed by the staff are in line with requirements for cannabis stores, the report said.
Staff also encourage the city to work with community partners to find alternative ways for people to gain access to low-cost financial products and services.
The deadline for registering as a delegate or submitting the entire meeting in writing to the September 7th committee is September 4th at 10 a.m. To register, visit guelph.ca/delegation, call 519-837-5603 or email [email protected]