TORONTO, ONTARIO--(Marketwired - June 3, 2016) - Toronto, in light of movement in the US by the Consumer Financial Protection Bureau to clamp down on repeat lending and protect consumers from high interest loan debt traps, ACORN Canada members strongly urge that the Canadian government also take this federal leadership on protecting consumers from predatory lenders and all too often the debt trap that follows.
Although some needed proposed protections – such as the requirement that longer-term loan payments consume no more than 5 percent of a borrower's monthly income – were dropped, this crackdown starting at the national level is desperately needed in the US and Canada!
ACORN Canada members are tired of a gap in federal leadership when it comes to consumer protection and banking. The high interest fringe lending sector is growing exponentially because the banks are failing low and moderate income communities. 15% of Canadians – close to five million people – are under-banked or have limited engagement with the mainstream financial sector. In 2015, 4.3% of Canadians had used a payday loan. The industry is worth about $2.5 billion annually, and installment loans are increasing rapidly. ACORN Canada members are fighting to get the federal government to legislate the Canadian banking and lending sector to:
| • | Create a national real-time data base to stop roll-over loans! | |
| • | Cap payday loan fees at $15 on $100 nationally; | |
| • | Stop pushing low and moderate income families to predatory banking services through exclusionary business practices; | |
| • | Amendment of the Criminal Code to lower the maximum interest rate from 60% to 30%; | |
| • | Creation of an Anti-Predatory Loan Act and legislate a code of conduct for all lenders; | |
| • | Amendment of the Bank Act to include Community Reinvestment that will require banks to devote a portion of their profit to community investments, and disclose information about their practices; | |
| • | A crack down on exorbitant and unfair bank fees; | |
| • | Establish citizen oversight committees to monitor bank fees and rates; | |
| • | The creation of a fund to encourage low interest alternative financial providers; | |
| • | Improve transparency; | |
| • | Legislated reinvestment targets to ensure Canada's banking sector invests in the Canadian communities where they've made their money. | |
| Donna Borden, | ||
| ACORN Canada | ||
| National Leader | ||
Contact Information:
in French or English, contact:
Judy Duncan
ACORN Canada
416 996 6401
canadaacorn@acorncanada.org