A city of Kitchener committee is considering reducing the number of authorized payday lending establishments in the city.
A report presented to Kitchener’s finance and business services committee on Monday recommends limiting the number of payday loan outlets to 10 and monitoring the location of outlets. There are currently 18 payday loan agencies in the city.
Helen Fylactou, licensing manager for the city of Kitchener, said the city tries to strike a balance between protecting consumers and allowing payday loan businesses to work for people who need them.
“If this were approved by the board, no new establishments would be allowed until the total number of stores was below 10,” she said.
The city is also considering increasing fees for new payday loan license fees, as well as for license renewal or late payment of license fees.
Kitchener’s approach to limiting payday lending establishments and raising fees is similar to what the city of Hamilton has done, she adds.
Hamilton reduced the number of establishments to match the number of neighborhoods in the city.
Public support limit, by city
City staff conducted online public consultations, consulted with a number of community groups and contacted the payday loan operators themselves.
The report says people have raised concerns that payday loan companies are adding to the cycle of poverty, taking advantage of vulnerable populations and having very high fees.
Many respondents showed support for having a limit for payday loan companies and supported the idea of having establishments located far from addiction services or gambling facilities, Fylactou said.
The majority of participants also said they did not like having payday loan services in the community.
The report will be presented on Monday to a finance and corporate services committee. He will have to go to council for a vote before the recommendation can be approved.