Campaigners Call for End to Predatory Lending Nationwide

Anti-poverty activists say Ottawa should join the fight for fair banking by lowering the "criminal rate of interest" by some lending firms.

ACORN Canada, a community organization representing low and moderate-income people, recently held demonstrations against “predatory lenders” such as Easy Financial and Fairstone.

The New Brunswick chapter rallied on January 24 outside a Fairstone office in Moncton as part of a National Day of Action. ACORN also held rallies in Calgary, Toronto, and several other cities across the country.

The group is demanding the federal government lower the "criminal rate of interest" charged by some firms that ranges from 60 to 30 per cent inclusive of all charges, fees, and interest rates, said Peter Jongeneelen, co-chair of ACORN NB. 

He said banks are “basically abandoning” low and moderate-income people, so that they are forced to go to less desirable places for loans.

The Criminal Code of Canada currently prohibits annual interest rates exceeding 60 per cent. 

The federal Liberal Party pledged to “crack down on predatory lenders by lowering the exceedingly high interest rates in its 2021 election platform and launched “consultations on fighting predatory lending” lasting from August to October 2022. 

ACORN members from all over Canada sent more than 600 submissions to the federal government, highlighting their experiences with predatory lenders and the need for urgent action.

Banks are closing down in rural areas such as Grand Manan Island and people are forced to seek private lenders for emergency credit, said Jongeneelen. 

But relying on private lenders comes with a considerable price, he said. 

“A lot of people are one emergency away from having to use these predatory lenders… they can set pretty much whatever they want as an interest rate and get away with this. It’s basically legal loan sharking", says an ACORN representative.