United Way Poverty Report Doesn't Reflect Reality of Payday Borrowers
* New Survey of 500 Payday Loan Borrowers by Pollara Tells Different Story *
* CPLA Welcomes United Way in Joining its Long-Standing Call for Swift Government Regulation *
- PUBLICATION: Canadian Business Online
- DATE: Monday, November 26, 2007
TORONTO (CNW) - The Canadian Payday Loan Association (CPLA) today reacted to the United Way Poverty Report by pointing to a new, groundbreaking survey of 500 payday loan borrowers in Ontario conducted by Pollara, Canada's leading public opinion survey company. The poll results can be found on CPLA's website at: www.cpla-acps.ca.
The CPLA welcomed the United Way in joining its long-standing request that the Ontario government move swiftly to introduce consumer protection legislation and set a cap on allowable fees that balance consumer protection with a viable industry. The CPLA has been working closely with all governments - including Ontario - for three years towards legislation and rules that will regulate the payday loan industry.
Earlier this year, the federal government amended the Criminal Code to allow provinces to regulate the payday loan industry and set a maximum allowable cap on fees. The Ontario government has publicly indicated its support for regulation and rate caps but has yet to introduce legislation.
Pollara conducted a survey of 500 payday loan borrowers in August and September 2007 and is the first statistically-relevant poll of payday loan customers ever conducted in Ontario. The margin of error of the poll is +/- 4.4%, 19 times out of 20.
Highlights of the survey of payday loan customers include: << - Household incomes are on par with average Ontarians (43% of Ontarians report household income of less than $50k compared to 42% of payday loan borrowers) - More than half (51%) have completed post-secondary education - Borrowers have access to a variety of forms of credit, including credit cards, lines of credit and overdraft protection - Borrowers deliberately choose payday loans over products offered by banks and credit unions due to "convenience", "hours of operation" and "speed of service".
"The Canadian Payday Loan Association supports regulation and consumer protection," said the Hon. Stan Keyes, President of the Canadian Payday Loan Association. "We believe in educated consumers - and an educated public - which is why we have to respectfully disagree with the United Way's depiction of payday loan customers as poor, uneducated and unaware of what they're getting themselves into."
"The payday loan industry has always been an easy target of quick sound bytes regarding poverty, but Pollara's groundbreaking survey of payday loan customers demonstrates that customers are educated, have clear credit options and are deliberate in choosing a payday loan over other forms of credit."
The CPLA was founded in 2004 and represents 20 companies nationwide - about 40% of the industry. Members of the CPLA abide by a tough Code of Best Business Practices that is overseen by an independent investigator. The CPLA has led the call for industry regulation that protects consumers and ensures a viable industry.
Highlights of the survey of payday loan customers include: << - Household incomes are on par with average Ontarians (43% of Ontarians report household income of less than $50k compared to 42% of payday loan borrowers) - More than half (51%) have completed post-secondary education - Borrowers have access to a variety of forms of credit, including credit cards, lines of credit and overdraft protection - Borrowers deliberately choose payday loans over products offered by banks and credit unions due to "convenience", "hours of operation" and "speed of service".
"The Canadian Payday Loan Association supports regulation and consumer protection," said the Hon. Stan Keyes, President of the Canadian Payday Loan Association. "We believe in educated consumers - and an educated public - which is why we have to respectfully disagree with the United Way's depiction of payday loan customers as poor, uneducated and unaware of what they're getting themselves into."
"The payday loan industry has always been an easy target of quick sound bytes regarding poverty, but Pollara's groundbreaking survey of payday loan customers demonstrates that customers are educated, have clear credit options and are deliberate in choosing a payday loan over other forms of credit."
The CPLA was founded in 2004 and represents 20 companies nationwide - about 40% of the industry. Members of the CPLA abide by a tough Code of Best Business Practices that is overseen by an independent investigator. The CPLA has led the call for industry regulation that protects consumers and ensures a viable industry.