Payday Loans

Mr. Kang: Thank you, Mr. Speaker. Last fall this House voted in
support of a motion to cap interest rates on payday loans. The need
to ensure that young families who turn to these loans are protected
is more important now than ever. With mounting job losses and
economic uncertainty, action must be taken before more people are
forced into unmanageable debt. To the Minister of Service Alberta:
when will there be legislation capping the interest rates charged by
payday loan companies?
The Speaker: The hon. minister.
Mrs. Klimchuk: Thank you, Mr. Speaker. This question is very
timely. Currently Service Alberta is finishing up a consultation with
a number of the stakeholders with respect to the issue of payday
loans. A number of issues are on the table – the rollover rates, the
interest rates that are charged – and it is indeed a huge issue of
concern. As minister I’ve been very concerned about the proliferation
of these businesses, and we are at the point where we’ll be
bringing something forward very soon.
The Speaker: The hon. member.
Mr. Kang: Thank you, Mr. Speaker. To the minister again: what
supports are in place now to help these individuals who have already
been trapped into the outrageous interest rates charged by the payday
loan companies?
The Speaker: The hon. minister.
Mrs. Klimchuk: Thank you, Mr. Speaker. I think it’s incumbent
upon the consumer, when they do choose to go to those businesses,
to do their research. The unfortunate part is that some of those
individuals may have a bad credit rating, and that’s perhaps why
they go. Perhaps going to a credit union or a bank that’s under
Alberta’s jurisdiction would be a good idea. I think that it’s
incumbent upon the consumer to be careful where the go when they
choose to use those services.
The Speaker: The hon. member.
Mr. Kang: Thank you, Mr. Speaker. I think the minister’s been
concerned for a long time. Last fall the minister used the industry
line that a wide range of people use these payday loans, yet federal
agencies report that young, low-income families are those most
likely to get one of these loans. To the Minister of Service Alberta
again: why does the minister continue to take the side of industry in
this debate?
The Speaker: The hon. minister.
Mrs. Klimchuk: Thank you, Mr. Speaker. As was mentioned
previously in this House, a lot of consumers, individuals with
incomes over $70,000, are using payday loan companies to support
them. Moving forward, in the consultation that we have done, we’ve
actually been able to interact with people who are using these
services so we can determine why they need these services and what
kinds of challenges they’re facing. We want to make sure that this
is done the right way so that we do what’s best for Albertans.