THUNDER BAY -- A member of Thunder Bay city council says payday loans companies operating in the city need to be clearer about the interest that they charge.
Northwood Coun. Shelby Ch'ng plans to table a resolution in council chambers later this month with the aim of requiring payday loan businesses to put up signs showing the equivalent annual interest rate for the fees they charge for loans.
Ch'ng said the lack of financial literacy is a problem for some people in the community. She cited as an example some of the things she hears about proposed property tax hikes.
"People will frequently say that they only get a two per cent raise at their jobs, and yet taxes are going up by three per cent," she said.
"Well, three per cent on the average residential home is a lot lower than a two per cent increase on the average income."
Ch'ng said the implications of "not doing the math" also translate to the 12 per cent of Thunder Bay residents living below the poverty line who may not understand the true cost of a loan. She added that one of her own relatives who fell on hard times at one point took out a loan and had a difficult experience as a result.
The councillor acknowledged that senior governments regulate lenders, but said there are things that municipalities can do in this sector as well.
She also plans to take on the issue of where payday loan businesses are allowed to operate, specifically looking to keep them away from areas "where vulnerable people are known to frequent." Ch'ng pointed to homeless shelters, casinos, or schools, "places where people can get easy access to money that's really going to set them back in the future."
Ch'ng will present a resolution on Oct. 31, seeking a report on the issue from city administration.