Local News

Crackdown on payday loans

February 21, 2018

A LOT of people in our local community know all too well how hard it is to keep up with the cost of living, provide for their families and make ends meet.


That can be more challenging when expenses arise, like a broken fridge or washing machine. For many, the response is to take out a payday loan, whether through an upfront cash loan or a rent-to-buy lease.


These arrangements can sometimes legitimately help families in need but often they're set up in a way that traps the lowest-paid in a cycle of debt. A government report received two years ago found some families were paying more than $3000 for household goods which normally cost $345 which is an interest rate of 884 per cent.


The recommendations would help struggling families by imposing measures such as a cap on rent-to-buy schemes, requiring payday loans to have equal repayment and payment intervals, and preventing door-to-door selling of consumer leases.


This article first appeared in the Albert & Logan News on 21 February 2018.