Among the many items adopted at the city Council meeting this week, the first after the summer holidays, there was one change in the regulation for the protection of Toronto residents with low incomes.
After discussion of the report of the Committee, the Council voted unanimously to stop issuing licenses to new micro-credit institutions in Toronto.
According to the report, currently in Toronto, there are 187 items of the issuance of short-term loans.
Members of the city Council Josh Matlow and Kristin Wong-Tam pointed out the “predatory” nature of these organizations, saying that the result of their actions, people often find themselves in hopeless debt.
Wong-Tam said that poor people are the target group of these organizations that impose so extravagant the Commission that her back is often not possible.
Other recommendations that have been made on this question include a request to the province to limit annual interest rates on micro-loans to 30% or less and prohibit institutions that provide micro-loans to place advertising on city property.
They also voted to ask the Federal government to limit all loan fees of $15 for every $100 and to reduce the maximum interest rate from 60 to 30% by making amendments to the criminal code.
And while many believe that change is a step in the right direction, others say that these organizations can sometimes be the only option for socially unprotected citizens.
As noted in the report, “consumers usually are turning to microcredit in case of emergencies or unavoidable expenses such as car repairs, rent or utility payments”.
Thus, there are those who believe that require a much more deliberate changes that the population had a choice of where to go in such situations.
“The volume of social assistance and the minimum wage should be increased so that people did not go to these lenders,” wrote Kalin Dokis on Twitter.
“Well, part of the problem solved, but what to do with existing institutions, and this does not solve the problem of people who are forced to go there. Whether it will lead to a rise in the number of lenders to meet the market demand?” – tweeted JMJimmy.
And although many say that change is a good start, many people in Toronto seem to believe that much remains to be done.
The city Council could make this change due to provincial regulations, introduced last winter, which allow municipalities to create their own rules concerning the number of issuing micro-loans.
Hamilton was the first city that has introduced regulations to restrict and minimize the number of them in January.
“We hear again and again stories about how people’s lives were destroyed, leading to depression, broken families and even suicide because they were victims of predatory, parasitic micro-lenders,” said Matlou during the debate.
“People will never be able to escape from the vicious circle in which they find themselves, because they will never be able to eliminate the need to pay these debts.”