Committee to vote on limiting payday loan locations in Kitchener

A City of Kitchener committee is looking at cutting back on the number of payday loan establishments allowed in the city.

A report before Kitchener's finance and corporate services committee on Monday recommends limiting the number of payday loan locations to 10 and controlling where the outlets are located. There are currently 18 payday loan locations in the city. 

Helen Fylactou, manager of licensing for the City of Kitchener, said the city is trying to find a balance between protecting consumers and allowing payday loan businesses to operate for people who need them.

"If this was approved through council, no new establishments would be permitted until the total number of stores was under 10," she said. 

The city is also looking at raising fees for new payday loan license fees, as well as for renewing a license or paying licensing fees late.

Kitchener's approach to limiting payday loan establishments and increasing fees is similar to what the City of Hamilton did, she adds.

Hamilton reduced the number of establishments to match with the number of wards in the city.

Public supports limit, city says

City staff did online public consultations, consulted a number of community groups and reached out to payday loan operators themselves.

The report said people reported concerns that payday loan businesses add to the cycle of poverty, take advantage of vulnerable populations and have very high fees.

Many of the responders showed their support for having a limit of payday loan businesses and supported the idea of having establishments located far from addiction services or gambling facilities, Fylactou said.

The majority of participants also said they disliked having payday loan services in the community.

The report will be presented a finance and corporate services committee Monday. It will have to go to council for a vote before the recommendation could be approved.