Buffer zones between Ottawa's payday lenders on the table
City's existing stores would be grandfathered in under staff recommendations
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- City council approved both the licensing and zoning of payday loan stores on Sept. 25, 2019.
Recommendations by city staff are calling for limits on where payday lenders can set up shop in Ottawa.
In a report to the planning committee and city council, staff favour a minimum separation distance of one kilometre between payday loan establishments, which can charge extremely high interest rates for cash advances.
Council approved a motion from Mayor Jim Watson in April 2018 asking staff to come up with a new set of rules to prevent too many payday lenders from setting up in poorer neighbourhoods.
Many outlets are clustered along Montreal Road in Vanier, Bank Street in Centretown and St. Joseph Boulevard in Orléans.
Watson said having a glut of businesses such as these isn't good for the residents or economy of a neighbourhood.
Social organizations say clusters of these landers make it easier for people to take out high-interest loans from several places, driving them deeper into debt.
"All of the legislation that [the city] is putting in place is what we can do within the city's powers," said Rideau-Vanier Coun. Mathieu Fleury, who said he was happy with the recommendations.
Existing stores grandfathered in
If the changes pass unchanged, it would mean existing payday loan outlets outside the new zoning regulations would be allowed to stay.
Once a store moves out and is replaced by another businesses, the new zoning rules would apply, preventing another payday loan business from setting up there.
The hope is that over time they would spread out and there would be fewer of them.
- City moves to curb spread of payday loan outlets
- How a $1,400 payday loan ballooned to more than $10K
The recommendations also call for 500 metres between payday loan centres and casinos, and 300 metres between payday lenders and schools.
While Fleury thinks the recommendations are moving in the right direction, he believes collectively governments could do better.
"We could do better to not fail those who need access to short term loans," he said.
"We could force the big banks to to have a lending program for the vulnerable residents and they don't have that, they're not interested in that market. That's really a federal government component."
The recommendations will go before planning committee Sept. 12, and are set to go to city council Sept. 25.