A new payday loan centre on Main and Dundurn might be exploiting inner-city poverty, but the question is: what exactly are we going to do about it?
By Ryan Janssen
Published January 17, 2014
For as long as I could remember, there was a Taco Bell on the corner of Dundurn and Main Street. While its closure elicited no emotion from me, the vacant property and empty windows consistently sent my imagination into gear each time I walked past it.
I entertained grandiose visions of what could be, and I envisioned a clean slate on which we might build something better (better as in contributing to the social and economic fabric of the downtown, not necessarily 'better' than Taco Bell... I've just never been a taco kind of guy).
Walking past it yesterday, I saw that it has become a Cash Money payday loan centre. Even though I study emotion-focused psychotherapy, I had a hard time pinning down just what emotion I felt. Sadness? Disappointment? Anger? All of the above?
Why Cash Money? Are the sixteen cash advance centres in the lower city between Dundurn and Wentworth generating so much business that we need even more just a few kilometres down the road?
A payday loan centre offers a small advance on your next paycheque. With proof of a source of income, "our advance experts will then help you determine how much money you'd like to borrow (from $50 - $1,500), and will give you your cash on the spot - no cheque, no card, just cold hard cash!" according to the CashMoney website.
With a post-dated cheque, the loan will then be taken off the individual's next paycheque.
The loan itself will cost $21 per each $100 borrowed, and the cost of failure to repay is even heftier: the APR, or annual percentage rate of interest the loan will accrue, is a whopping 443.21 percent - 651.79 percent. A loan of $100 can easily double in just a month if it goes unpaid.
Obviously, incentive is needed to pay loans back. Yes, that's common sense. But when you combine the service that the centre offers - small personal loans to cover 'emergency expenses' - with the demographic that the centre services, you encounter problems.
The majority of this service's patrons live below the poverty line, so every expense is an emergency expense. Flash a sign that says "FREE MONEY!" and promise that it's easy, secure, fast, etc., and you've guaranteed your business.
These loans are used to cover living expenses on a month-to-month basis, and the average borrower relies on these loans for five months of the year. This service is more than a crutch: it's a wheelchair cemented to the ground, not going anywhere.
The sixteen (now seventeen) payday loan stores in and around our downtown core are, intentionally or not, cementing the indebtedness of vulnerable populations in this city.
So what do we do? Take up arms against the store owners? Scream for legislative action removing them from our backyards? Cry? Give more money to panhandlers?
Do what you want; I don't want to prescribe action, nor do I want to imply that one action is 'better' than another. And on that note, think what you want. Maybe Cash Money isn't all that bad. Maybe it's actually driving economic improvement in our city. My fight, if I'm in a fight at all, is not against you. My fight is for love and against injustice.
The Cash Money, which is now in my neighbourhood, is servicing people in need who likely are also living in my neighbourhood. On the one hand, I can fight to banish this service, leaving my still-unknown-to-me neighbours left with a need and no means or knowledge to rectify it.
On the other hand, I can develop a relationship with the individuals who use this service on a month-to-month basis. Maybe, after developing a relationship and with their permission, I can help them develop a sustainable budget within their means, and maybe help end a cycle of growing debt - or maybe not, but at least they now have the choice.
One option is motivated out of anger by a rotten system. The other option is motivated out of love for beautiful people. In the former, I fight against my enemies; in the latter, I make a few new friends.
So I'm not going to vandalize the new Cash Money store. I'm not going to lobby City Hall to remove one, two, or seventeen cash advance stores in the lower city. I'm not going to give vehement diatribes from my soapbox about the pitfalls of predatory lending.
I'm going to get to know my local community. I'll start with the floor I live on in my mid-rise apartment. Maybe you can start on the street you live on, and let me know how it goes.
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