City seeks feedback on limiting payday loan shops

Sarnia will consult the public before imposing new rules to limit the number of payday loan shops.

Sarnia will consult the public before imposing new rules to limit the number of payday loan shops.

There are currently 11 shops in Sarnia, which are legal financial institutions, located mainly in the Northgate and London Road commercial centres, with one downtown and on Confederation Street.

The city is proposing not to allow any more, and to prevent other payday lenders from move into existing locations once a shop closes.

Payday lenders typically offer loans at interest rates much higher than banks, to a maximum of $15 per $100 borrowed, according to the city.

The concern is people who can’t get credit at a bank are becoming caught in a vicious cycle of debt and going bankrupt.

Payday lenders joined strip clubs last year as the only two businesses classes the Ontario Municipal Act allows municipalities to regulate.

The proposed amendments are to be posted on speakupsarnia.ca.

The feedback will help shape a new bylaw expected to be brought to council for a vote in February.