Groups Say Consumers Need More Protection From Payday Lenders

Posted on Saturday, August 12, 2017 07:01 AM

The executive director of the Saint John Human Development Council is commending the provincial government for regulating the payday loan industry with new regulations coming in January.

But Randy Hatfield says he would like to see the province go a step further by examining the industry's fee structure as well as the cycle of debt that can be created by chronic, repeat borrowing.

Hatfield also wants to see a greater focus on financial literacy in New Brunswick so that consumers can avoid going into debt.

Since New Brunswick is new to regulating the industry, he adds the province could cherry pick the best provisions from other parts of the country to put together the best system here.

Meantime, a credit counsellor says most consumers who turn to payday loans find themselves in a desperate financial situation.

Louis Bourque with Credit Counselling Services of Atlantic Canada is encouraged by the new measures to protect consumers who borrow from payday lenders.

Bourque is urging the province to put safeguards in place which would monitor consumers who take out multiple payday loans.

Otherwise, he adds a consumer can end up playing the game of "robbing Peter to pay Paul".

(PHOTO - Randy Hatfield, Saint John Human Development Council)