Weston likely has more payday loan shops than any other part of Toronto. That may change, if only a little, as loan businesses come under increased pressure from local government.
For a large fee, payday loan shops will convert a post-dated cheque into cash. They are often used for short-term ‘cash crunches’, when a person is employed but does not have enough money to meet immediate expenses. The loans, however, are very expensive: Cash Money, a very popular franchise with 350 locations in Canada and 5 locations within 5 km of Weston, charges $21 for a 14 day loan of $100, the maximum allowed by law.
Payday loan and cheque-cashing business have been expanding rapidly but have recently been subject to much more regulation. Last year, the province restricted the amount of interest lenders could charge and limited their ability to ‘rollover’ loans—paying off one loan with another to the same client. These practices made it difficult for clients to get control of their debts.
The Etobicoke York Community Council (which covers Weston), heard a report today about payday loan stores. The report was commissioned because the council identified a “proliferation” of payday loan stores in the neighbourhood and because of concerns that these stores were operating without the correct permits. The council was concerned that some payday loan stores were accepting collateral (like old gold).
The report was referred for further review.