NDP bill would help put an end to predatory payday loans, allow credit unions to do microfinance

Halifax - People could be liberated from predatory payday loan companies if an NDP bill to allow credit unions to expand into microfinance is adopted. Nova Scotia has some of the highest maximum interest rates on payday loans in the country.

“As the cost of living rises in Nova Scotia and incomes continue to stagnate, payday lenders will continue to take advantage of Nova Scotians in financial distress. Payday lenders are easily ensnaring Nova Scotians in debt traps that are extremely challenging to reverse,” said Lisa Lachance, NDP Finance spokesperson. “This is a common-sense change. More than 143,000 Nova Scotians are already members of a credit union, and credit unions have a long history in our province. Allowing credit unions to provide microcredit services could be life-altering for some people.”

The NDP’s legislation would allow the province’s credit unions to provide microcredit loans. This would result in lower interest rates for people in financial need, and fewer predatory corporations trying to make money off people’s misfortune.

"Creating large-scale alternatives is the best way to stop predatory lending in Nova Scotia. Credit unions have a long history in Nova Scotia, and have branches throughout the province, making them the perfect alternative to payday lenders,” said Marijke Grijm, Chair of Dartmouth ACORN. “We are delighted to see the NSNDP bring this important bill forward and call on the government to quickly pass this through the legislature. Times are tough and low-income people need access to fair credit that does not lead to financial ruin."

About 22,000 households in Nova Scotia have used payday loans, according to Statistics Canada’s 2016 Survey of Financial Security. In the wake of the COVID-19 pandemic, it is critical to address the issue of payday loans.

-30-