Toronto City Council considers stricter rules for payday loan industry

Toronto city councillorshave voted to look atwaysto restrictwherepayday loan operators can set up shop in the city, to protect low-income Torontonians from spiralling into debt.

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Council approved a request Friday to the mayor's executive committee to look at drafting a bylaw that would stop payday loan branches fromclustering in certain neighbourhoods.

The proposal is considered a first step toward limiting the number of payday lenders in Toronto.

Rohan Jagroo is one of the many people city councillors are trying to protect.

Jagroosaid herequired cash quickly when he got married in 2013.

"I had no choice.I needed the money," he said.

Thatdecision led to a spiral of debt thattook him years to overcome. Jagroo said he was using three payday lenders at one point in time as he borrowed from one to payanother.

"For two years and nine months, I never saw a paycheque," he said, explaining how lenders seized his money before he could see it.

"I had nothing in the bank."

"It's no coincidence that there's a cluster effect of payday lenders in low-income neighbourhoods," said Coun. KristynWong-Tam, one of two councillors who tabled the motion.

She said manypeople who reside in her inner-city ward are often living paycheque to paycheque, leaving many vulnerable to spiralling into a debt crisis.

The Canadian Payday Loan Association has stated it isconcerned Toronto would place restrictions on where private businesses can operate. The group said these types of lending enterprises are regulated by the provincial government.

The province of Ontario is considering new legislation aimed at capping fees charged by payday loan firms along with bringing in a grace period for borrowers.