Calgary council votes to restrict payday loan operations

Payday-loan operators won't be able to cluster in poor areas after city council voted to prevent the businesses from operating within 400 metres of each other. 

Only Coun. Jim Stevenson of Ward 3 opposed the motion on Monday. 

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The move mirrors regulations that exist in other jurisdictions in Canada and the United States, and is similar to the rules governing liquor stores in Calgary, which can't operate within 300 metres. 

One of the major issues is the concentration of the businesses in poorer areas. 

Speakers at council on Monday highlighted the cycle of debt that often traps those who use payday-loan services, which charge high interest rates.

Mike Brown, public policy co-ordinator with local organization Momentum, cited statistics that say 22 per cent of those who use the services return monthly. 

He said that clustering of the lenders "legitimizes" them. 

The motion was also supported by the United Way and Vibrant Communities Calgary. 

Darrell Howard with VCC said the lenders "actually are counter-productive to the poverty-reduction strategies going on in this city."

After the vote, Ward 11 Coun. Brian Pincott said the issue affects entire communities and that Calgary has to "make sure we're looking after the people who are most vulnerable in our community."