Toronto No Longer Giving Licenses To Predatory Payday Lenders

"People can never escape the vicious cycle..."

Toronto announced that it will no longer issue new licenses to predatory payday lenders in Canada.

The news is a huge regulatory change that was approved 20-0 by the council on Wednesday night, according to CBC. It will help low-income Canadians avoid predatory lenders in Canada's biggest city. 

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"We heard over and over and over again stories of how people's lives were ruined, leading to depression, broken families, even suicide, because they were victims of these predatory, parasitical payday lenders," Josh Matlow, a councilmen, said before the vote. 

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In the United States, predatory payday loans are a big deal, too. One in ten Americans have taken out a payday loan, which  is a short, high-interest loan people usually get in emergencies. Predatory lenders often have hidden fees and growing interest rates that trap people into cycles of debt where they end up pay ten or twenty times more than they initial borrowed. 80 percent of borrowers usually end up renewing their loans, according to A Plus' reporting on the issue in 2015.

In Ohio, some interest rates are as high as 667 percent on payday loans. It's a $9 billion business in the U.S. In Toronto, there were 200 payday lenders open throughout the city. 

"People can never escape the vicious cycle they get into because they can never get out of having to pay off these debts," Matlow said. 

Now, those lenders are going to have to find a new place to do business.

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