Callander council is clearing the way for payday loan establishments to operate in the community.
Council has amended its zoning bylaw to allow payday loan establishments, which are common in North Bay, to operate in the commercial highway (C3) zoning sector.
C3 zones are normally found in the rural area of the community and away from built-up residential areas.
Last December, the council directed staff to create a draft bylaw that would license payday loan establishments.
Following a series of meetings and consultations during 2020, it was decided that payday loan establishments be added as a permissible use in the highway commercial (C3) zone.
The proposed bylaw amendment was ready by early spring.
However, before the council could approve it, a public meeting was necessary to see if the community had any objections or concerns.
That public input meeting took place on July 21 and not only were there no comments at the meeting by the public, the municipality also did not receive any written comments over amending the bylaw.
The lack of comment cleared the way for staff to present the proposed changes to council for its approval.
The move follows provincial legislation passed in July which provides additional protection for payday loan borrowers by capping interest rates and fees on defaulted loans.
Lenders are not permitted to charge interest in excess of 2.5 per cent per month non-compounded, providing rate relief to borrowers unable to repay their loans on time.
The government also established a maximum fee of $25 that may be charged by lenders for dishonoured or bounced cheques or pre-authorized debits.
These measures, according to the province, protect borrowers from having to pay high fees while already facing financial hardship.
“It’s the first step,” North Bay deputy mayor Tanya Vrebosch was quoted at the time, calling the maximum interest rates charged by the companies “very expensive, as close to a loan shark as you can get.
“Once you’re in, it’s a vicious cycle,” Vrebosch said. “You borrow then have to borrow to pay off what you already owe.”
Those who turn to the payday loan companies, she said, are primarily those who can’t afford to borrow, who are not able to secure a loan from banks, whose credit cards are maxed out, and who face a sudden emergency.
But the interest rates they charge, Vrebosch said, are too high, and the penalties are onerous.
Vrebosch admitted she doesn’t like them “at all,” but recognized that in an emergency situation, a payday loan company is sometimes the only option for some people.
The province decreased the cost of a payday loan to $18 per $100 in 2017, down from $21, and dropped it to the present maximum of $15 in 2018.
According to the Financial Consumer Agency of Canada, the cost of a payday loan could be the equivalent to an interest rate of 500 to 600 per cent.
With files from The Nugget and Canadian Press
Rocco Frangione is a Local Journalism Initiative reporter working out of The North Bay Nugget and funded by the Government of Canada.