ACORN Canada, an offshoot of the venerable 34-year-old U.S.-based organization of low- and moderate-income families, is just getting off the ground. But they’ve already scored a direct hit on the so-called “payday loan” industry — an unregulated, unaccountable business that preys on the financial desperation of Canada’s poor.
ACORN released a study [PDF] showing the estimated 1,200 payday loan outlets regularly charge interest rates of 300 to 600%, despite a Criminal Code prohibition against anything higher than 60%.
Another interesting finding was how often Money Mart and its competitors would open outlets wherever local bank branches had closed, becoming in essence the only financial game in town… or at least in the neighbourhood.
Years ago, workers would be kept in debt through ruinous prices and credit terms dictated by the company store. Too bad some traditions never seem to die.
(See coverage by Canadian Press, and a call for government regulation from, of all people, Linda Leatherdale of the Toronto Sun. Congrats to John Young, friend and ACORN Canada exec director.)
