News / Calgary

Payday loan removal will improve 17 Ave SE streetscape, revitalization: BRZ

New government legislation cuts interest rates, encourages credit unions to offer payday-loan-like services

Pamela Beebe has spent more than $12,000 in interest after withdrawing payday loans since 2008.

Jeremy Simes / For Metro

Pamela Beebe has spent more than $12,000 in interest after withdrawing payday loans since 2008.

“Payday loans” is the first thing Forest Lawn residents say when asked about what they don’t like about the 17 Avenue SE shopping strip, according to to International Avenue BRZ Executive Director Alison Karim-McSwiney. 

On Thursday, MLAs will continue to debate Bill 15, an act to End Predatory Lending, which targets payday loan companies by reducing interest rates. 

For Karim-McSwiney, the legislation will aid in revitalizing the popular road as it could cause some of the 11 payday loan sites on 17 Avenue to close, making room for other businesses to open. 

“I think it will mean more people will have more money in their pockets, which will benefit the businesses in the community and people’s financial health,” Karim-McSwiney said. “Hopefully we’ll see a decrease in poverty rates.”

The legislation will cap fees on payday loans at $15 per $100 borrowed, down from the current $23 per $100.

It also encourages credit unions and other financial institutions to offer bank accounts to people who must deal with payday loans companies, as they are left with no other options due to bad credit and other circumstances. 

In March, city council accepted recommendations that require a 400-metre separation between future payday loan sites looking to open shop.

Ward 11 Coun. Brian Pincott said the legislation compliments the city’s plans to reduce poverty. 

“All of that is opening the door for other financial institutions to come forward with alternative offerings that will serve this client base,” he said. “It’s really hard to revitalize a strip when there are 11 payday loan facilities on that strip.”

Karim-McSwiney said the legislation is only part of a multi-pronged approach to revitalize the area — the city has begun its $98 million transitway project that adds bus-only lanes, improved roads, better street lighting and cycling facilities to the 17 Avenue.

“The city’s 400-metre separation rule actually doesn’t do anything for us because these payday loan shops are already in place,” she said. “What actually will make a big difference is the legislation the province is pushing through.”

Pincott has no issue with payday loan companies potentially leaving the area. 

“The payday loan industry is going to have to review the rules and decide if that’s a model they want to operate under,” he said. “If they aren’t willing to or don’t feel they can operate under the rules, then they can leave.”

Pamela Beebe's visious cycle 

On top of working 40 hours a week, Pamela Beebe’s financial situation is so dire that she must take out payday loans to help support her family and repay debts.  

“It’s really challenging, but I have to do what I have to do,” said Beebe, who’s the breadwinner for her two children and husband, Tito, as he can’t work in Canada until he completes his immigration papers.

“It’s about $2,000 to get (the immigration) all done,” she said. “We just can’t afford it so it’s been put on hold.

Beebe was laid off from two jobs in 2015, prompting her to find work in Morley. The problem, though, is that her credit score is so low she can’t afford a car, so she relies on a friend to drive her. 

Her low credit score also means she doesn’t qualify for overdraft, which would largely halt her from needing payday loan services. 

Beebe realizes she’s in a vicious cycle using payday loans to pay off other debt and bills, she said, adding she’s looking for job stability to get out the cycle. 

“It all started with students loans — the debt kept piling and I have to keep paying that off,” she said. “I’m a little embarrassed about it, but this is really all I can do right now to get by. 

”I’m trying so, so hard to find a stable job — this one right now is just contact work.”

Beebe said the new legislation will let her save money after spending about $12,000 on interest since 2008. 

“I wish I could’ve saved that money,” she said. “My ultimate dream is to have a home one day, and just be able to save for the future.”

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