Service Nova Scotia & Municipal Relations: Payday Loans - Consumers Protect
Hansard, Page 589: July 13, 2006
MR. TREVOR ZINCK:
Mr. Speaker, my question, through you, is to the Minister of Service Nova Scotia and Municipal Relations. I want to draw your attention, and the attention of the minister, to an increasing and troubling situation developing across Nova Scotia, and that is of the payday loans industry. It's an industry that's built on institutes that allocate to mostly lower income earners. These people are struggling with cash-flow problems and find themselves in need of payday loans until payday. The interest rates, however, on some of these loans are numbered in the hundreds and thousands of percentage points. When all the fees and charges are rolled in, it's insurmountable for these people to catch up, and they're caught up in a cycle. My question to the minister is, will this minister tell the House how he can justify allowing these companies to run roughshod over the lives of ordinary Nova Scotians?
HON. JAMES MUIR:
Mr. Speaker, the honourable member raises a concern of this government. Indeed, it was referenced in the Party platform. What it will do is government will adopt some measures that will be needed to better protect consumers in reference to payday lenders.
MR. ZINCK:
Mr. Speaker, I guess it is going to be another study by this government, while many people in this province are standing by caught up in a cycle that they cannot catch up in. Other provinces, like Manitoba and Ontario and B.C., along with 15 U.S. States, have come out with legislation.
I, personally - this is how bad it has gotten - delivered groceries to a senior citizen the other night. When I asked for her Health Card to provide information for the food bank, out of her wallet came two cash cards. This is very detrimental to these people. They are short at the end of the month. My question is, why does your government, Mr. Minister, refuse to address the growing problem, as other provinces in Canada have now?
MR. MUIR:
Mr. Speaker, as I said in the first response, government is aware that there are concerns about payday lenders. I can tell you that, currently, the penalty for payday lenders - and some of them fall under the Criminal Code of Canada - there is a move by not only Nova Scotia but other ministers in the country who are responsible for consumer affairs to see that that penalty be moved from the federal government to the provincial government so provincial governments can better control regulations to benefit their citizens when it comes to payday lenders.
MR. ZINCK:
Mr. Speaker, obviously the honourable minister does not understand that we need legislation now. There are people caught up in this cycle. To understand the full scope of this problem the minister only has to open up the Yellow Pages and flip through the many advertisements. Perhaps the minister could sit down with some of my constituents and express to them his concerns. I have constituents who are running away from these payday loan companies, they are changing addresses, they are changing phone numbers, in fear. They have defaulted on loans. We need legislation now, Mr. Minister. My final question is, how many situations like this will it take before this government reacts?
MR. MUIR:
Mr. Speaker, this government committed to introduce legislation modelled on what happened in Manitoba, and that will be done this Fall.