December 15th, 2021
NDP says it's time to put an end to predatory lending
OTTAWA – While the cost of living keeps going up and people are struggling to make ends meet, the Trudeau government is failing to deliver the help Canadians urgently need. With nowhere to turn, some Canadians continue to take on high-interest loans. This week, NDP MP Peter Julian (New Westminster—Burnaby) re-introduced a bill to protect low-income and other vulnerable people from predatory lending practices.
“So many people have seen their financial situation deteriorate over the last two years. Because of this pandemic, many people have been forced to turn to high-interest lenders to make ends meet,” said Julian. “While the rich are getting richer, the government continues to allow the exploitation of the poorest and most vulnerable. People should not be forced into predatory loans because they fall on hard times, and this bill will limit the damage these loans can do.”
According to Statistics Canada, more than three million Canadians live below the poverty line. Many low-income Canadians use high-interest loans to buy food, pay rent or meet their basic needs. There is very little regulation in place from the Trudeau government on these loans, and New Democrats are calling for better regulations so that people aren’t trapped in a spiral of perpetual debt. At a time when so many Canadians are struggling, predatory lenders should not be allowed.
Seconded by NDP MP Lori Idlout (Nunavut), the bill will change the Criminal Code to lower the maximum legal interest rate from 60 per cent to 30 per cent and repeal the criminal interest rate loophole on payday loan agreements. First Nations, Inuit and Métis, particularly those who live in urban centers, fall victim to these predatory lending practices.
“The high interest rates can sometimes reach 500 or even 600 per cent on loans,” said Julian. “One of my constituents borrowed $700 a few years ago. So far, she has paid $13,000 dollars in interest charges and still owes the $700. This is legalized loansharking. The fact that the Trudeau government doesn’t see this as a problem shows that they don’t have the backs of regular people. It’s time for the federal government to step in and regulate these predatory lenders.”
Prime Minister Trudeau promised to lower the interest rate for installment loans in Budget 2021 and in the Liberal party’s election platform. In the Fiscal Update, as the pandemic continues and the cost of living steadily rises, New Democrats call on the Liberal government to adopt the clear measures in this bill to make life more affordable for all Canadians.