How much interest should be charged on payday loans?
That’s being debated this week before the public utilities board.
Right now on a $100 loan, you would be charged $17 interest over two weeks.
Lawyer Byron Williams represents a group who wants that changed to $15.
“The one-off loan is expensive, but it’s one-off. It’s the repeat loan and the risk of being trapped in a debt cycle that is very concerning to our clients. That’s where consumers are most vulnerable.”
Williams says those customers tend to have lower incomes and fewer borrowing options with mainstream banks.
“We had an outstanding research team, they talked with 130 Manitobans who take out payday loans. 31 per cent of those were taking out six or more loans in a year.”
The $15 interest on a $100 loan would be consistent with rates in the US.