Low-income Albertans deserve better protection when borrowing from payday loan companies

CALGARY, AB (March 6, 2015): Dr. David Swann says the government must take action to protect Albertans from high interest payday loan companies.

“These businesses disproportionately serve low-income people that find themselves in dire circumstances and in need of quick cash,” says Swann. “However, for many borrowers, the hope afforded by that easy money quickly fades when they find themselves hit with obscenely high interest charges. These are families in need, post-secondary students, and individuals with addiction issues.

”The government needs to dramatically tighten up its regulation of the industry to ensure that people are better protected.”

Swann’s comments come after Momentum Community Economic Development, a non-profit organization in Calgary, recommended the government lower the current maximum interest rate of 23 percent.

“These loans are predatory and lock many unsuspecting borrowers into a spiraling cycle of debt from which there is no easy escape,” says Swann. “There are common sense regulations that the government can and should enact to prevent the exploitation of vulnerable Albertans.”

Last fall, we passed a policy resolution calling on the government to prohibit high interest charges and fees for payday and car title loans, and encourage financial institutions to offer low-interest, short-term credit to people in need of smaller-size loans.