OTTAWA — Today, NDP MP Peter Julian (New Westminster-Burnaby) tabled Private Member’s Bill C-274, which would limit the interest rates private companies can charge on loans to vulnerable Canadians.
“People are using high-interest loans to buy food, pay rent, or meet their basic needs. But these loans are not well regulated by the government and instead of helping people the loans often catch Canadians in a vicious debt spiral with skyrocketing interest rates of up to 500 per cent (plus hidden fees) which only profit the lenders,” said Julian. “We are a year into the pandemic, people are struggling financially and it’s clear that the federal government and the banking sector have failed low and moderate-income people. They’re standing by while the poorest and most vulnerable struggle to get through the pandemic while the rich are getting richer.”
According to Statistics Canada, more than 3 million Canadians live below the poverty line, and with the Covid-19 pandemic, many families, small business people, and vulnerable individuals have seen their financial situation deteriorate. To make ends meet, without any other options, Julian fears even more of them will have had to turn to high-interest rate lenders.
“Today I spoke with Donna Borden from ACORN Canada. She joined this organization which fights for fairer regulations on loans after a personal experience using these high- interest lending services. Over ten years ago, she had to borrow $10,000 to deal with an unexpected expense and, after paying back $25,000 in interest, she is told she still owes the original $10,000. It’s simply outrageous,” said Julian. “She went to the police and they told her that if she had gone to a loan shark that person would be arrested by now. Because these sky-high interest rates are legal there is nothing the police can do for her. How can the government allow this to continue?”
Rather than protecting large banks and predatory lenders, the Trudeau government should immediately invest in the establishment of Cooperative or Non-profit Lending Circles to protect low-income and other vulnerable consumers from abusive lending practices and improve access to fair banking options.
Media contact : Harun Jasarevic from Peter Julian’s Office [email protected] // 613-818-3640