Item - 2019.GL7.15

Tracking Status

GL7.15 - Update on the City of Toronto Municipal Code Chapter 545, Licensing of Payday Loan Establishments

Decision Type:
ACTION
Status:
Amended
Wards:
All

City Council Decision

City Council on October 2 and 3, 2019, adopted the following: 

 

1.  City Council direct the Executive Director, Municipal Licensing and Standards, notwithstanding the current provisions in the City of Toronto Municipal Code Chapter 545, Licensing, to immediately cease issuing new licences to payday loan establishments in the City of Toronto.

 

2.  City Council prohibit payday loan establishments, pawnshops and cash for gold vendors from advertising on City property, including City Agencies, Boards and Commissions.

 

3.  City Council require all payday loan establishments in the City of Toronto to provide City-sanctioned information on credit counselling services, including literature that outlines the financial empowerment supports available to help residents manage their financial situation in order to avoid cash shortfalls and cyclical debt.

 

4.  City Council direct the Executive Director, Social Development, Finance and Administration, in consultation with the General Manager, Economic Development and Culture, the General Manager, Toronto Employment and Social Services, and Executive Director, Municipal Licensing and Standards, to convene discussions with the financial services industry, including credit unions and the not-for-profit sector, on improving access to relevant financial products and services such as access to cash for Toronto residents.

 

5.  City Council request the Executive Director, Municipal Licensing and Standards, to report to the General Government and Licensing Committee at its meeting on January 6, 2020 on the following:

 

a.  options to restrict advertising from payday loan establishments in the City of Toronto;

 

b.  the feasibility of creating a minimum separation distance between payday loan establishments and between payday loan establishments and schools; and

 

c.  the feasibility of establishing a process for the local Councillor to object to the relocation of a payday loan establishment within the same Ward.

 

6.  City Council request the Province of Ontario to limit the annual interest rates for all payday loans to 30 percent annually.

 

7.  City Council request the Federal Government to:

 

a.  require chartered banks to have branches in low-income neighbourhoods which offer credit lines to low-income people at the same rates they offer to other customers;

 

b.  create a national database of payday loan establishment users to stop users from taking out loans to pay off other loans;

 

c.  cap all payday loan fees at $15 on every $100 loaned;

 

d.  amend the Criminal Code of Canada to lower the maximum interest rate from 60 percent to 30 percent; and

 

e. work with partners such as credit unions, to encourage and steward the development of lower-cost financial products that can provide an alternative for users of payday loan establishments.

 

8.  City Council forward this Item to the Association of Municipalities of Ontario and the Federation of Canadian Municipalities.

Public Notice Given

Background Information (Committee)

(August 28, 2019) Revised Report from the Executive Director, Municipal Licensing and Standards on Update on the City of Toronto Municipal Code Chapter 545, Licensing of Payday Loan Establishments
https://www.toronto.ca/legdocs/mmis/2019/gl/bgrd/backgroundfile-136987.pdf
(August 26, 2019) Report from the Executive Director, Municipal Licensing and Standards on Update on the City of Toronto Municipal Code Chapter 545, Licensing of Payday Loan Establishments
https://www.toronto.ca/legdocs/mmis/2019/gl/bgrd/backgroundfile-136660.pdf
Attachment 1 - Payday Loan Establishment Locations with the 25-Ward Model
https://www.toronto.ca/legdocs/mmis/2019/gl/bgrd/backgroundfile-136722.pdf
(August 27, 2019) Public Notice - Update on the City of Toronto Municipal Code Chapter 545, Licensing of Payday Loan Establishments
https://www.toronto.ca/legdocs/mmis/2019/gl/bgrd/backgroundfile-136735.pdf

Motions (City Council)

1 - Motion to Amend Item (Additional) moved by Councillor Stephen Holyday (Withdrawn)

That City Council amend the City of Toronto Municipal Code Chapter 441, Fees and Charges, to include a $645.53 application fee for a payday loan establishment location change request, adjusted annually based on the Consumer Price Index.


Motion to Withdraw a Motion moved by Councillor Stephen Holyday (Carried)

That Councillor Holyday be permitted to withdraw his motion 1.


2 - Motion to Amend Item moved by Councillor Anthony Perruzza (Carried)

That:

 

1. City Council amend General Government and Licensing Committee Recommendation 2 by adding the words "including literature that outlines the financial empowerment supports available to help residents manage their financial situation in order to avoid cash shortfalls and cyclical debt" so that the Recommendation now reads as follows:

 

2.  City Council require all payday loan establishments in the City of Toronto to provide City-sanctioned information on credit counselling services, including literature that outlines the financial empowerment supports available to help residents manage their financial situation in order to avoid cash shortfalls and cyclical debt 

 

2. City Council amend General Government and Licensing Committee Recommendation 5 by adding a new part so Recommendation 5 includes:

 

5.  City Council request the federal government to:

 

e. work with partners such as credit unions, to encourage and steward the development of lower-cost financial products that can provide an alternative for users of payday loan establishments.

 

3. City Council direct the Executive Director, Social Development, Finance and Administration, in consultation with the General Manager, Economic Development and Culture, the General Manager, Toronto Employment and Social Services, and Executive Director, Municipal Licensing and Standards, to convene discussions with the financial services industry, including credit unions and the not-for-profit sector, on improving access to relevant financial products and services such as access to cash for Toronto residents.

 

4. City Council prohibit payday loan establishments, pawnshops and cash for gold vendors from advertising on City property, including City Agencies, Boards and Commissions.

Vote (Amend Item) Oct-02-2019 5:37 PM

Result: Carried Majority Required - GL7.15 - Perruzza - motion 2 Part 4 only
Total members that voted Yes: 18 Members that voted Yes are Paul Ainslie, Ana Bail„o, Brad Bradford, Mike Colle, Gary Crawford, Joe Cressy, John Filion, Paula Fletcher, Jim Karygiannis, Cynthia Lai, Mike Layton, Josh Matlow, Jennifer McKelvie, Denzil Minnan-Wong, Frances Nunziata (Chair), Gord Perks, Anthony Perruzza, Kristyn Wong-Tam
Total members that voted No: 2 Members that voted No are Stephen Holyday, James Pasternak
Total members that were Absent: 6 Members that were absent are Shelley Carroll, Michael Ford, Mark Grimes, Jaye Robinson, Michael Thompson, John Tory

Motion to Adopt Item as Amended (Carried)

Adoption of General Government and Licensing Committee Recommendation 4 [now Part 6 of City Council's decision]:

 

4.  City Council request the Province of Ontario to limit the annual interest rates for all payday loans to 30 percent annually.

Vote (Adopt Item as Amended) Oct-02-2019 5:38 PM

Result: Carried Majority Required - GL7.15 - Adoption of General Government and Licensing Committee Recommendation 4 only
Total members that voted Yes: 19 Members that voted Yes are Paul Ainslie, Ana Bail„o, Brad Bradford, Mike Colle, Gary Crawford, Joe Cressy, John Filion, Paula Fletcher, Jim Karygiannis, Cynthia Lai, Mike Layton, Josh Matlow, Jennifer McKelvie, Denzil Minnan-Wong, Frances Nunziata (Chair), James Pasternak, Gord Perks, Anthony Perruzza, Kristyn Wong-Tam
Total members that voted No: 1 Members that voted No are Stephen Holyday
Total members that were Absent: 6 Members that were absent are Shelley Carroll, Michael Ford, Mark Grimes, Jaye Robinson, Michael Thompson, John Tory

Motion to Adopt Item as Amended (Carried)

Adoption of the balance of the item as amended.

Vote (Adopt Item as Amended) Oct-02-2019 5:39 PM

Result: Carried Majority Required - GL7.15 - Adoption of the balance of the item as amended
Total members that voted Yes: 20 Members that voted Yes are Paul Ainslie, Ana Bail„o, Brad Bradford, Mike Colle, Gary Crawford, Joe Cressy, John Filion, Paula Fletcher, Stephen Holyday, Jim Karygiannis, Cynthia Lai, Mike Layton, Josh Matlow, Jennifer McKelvie, Denzil Minnan-Wong, Frances Nunziata (Chair), James Pasternak, Gord Perks, Anthony Perruzza, Kristyn Wong-Tam
Total members that voted No: 0 Members that voted No are
Total members that were Absent: 6 Members that were absent are Shelley Carroll, Michael Ford, Mark Grimes, Jaye Robinson, Michael Thompson, John Tory

Point of Privilege by Councillor Jim Karygiannis

Councillor Karygiannis, rising on a Point of Privilege, stated that Councillor Perruzza probably did not mean his remarks about Councillor Pasternak and that if asked, he would withdraw those comments.


Point of Privilege by Councillor Anthony Perruzza

Councillor Perruzza, rising on a Point of Privilege, stated that his comments were tongue-in-cheek and he would withdraw them.


Point of Privilege by Councillor Jim Karygiannis

Councillor Karygiannis, rising on a Point of Privilege, stated that the comments by Councillor Perruzza were still inappropriate.


Point of Privilege by Councillor Anthony Perruzza

Councillor Perruzza, rising on a Point of Privilege, stated that he agreed and that he had withdrawn his comments.

Ruling by Speaker Frances Nunziata
Speaker Nunziata accepted the Points of Privilege and ruled that Councillor Pasternak was satisfied.


Point of Privilege by Councillor Anthony Perruzza

Councillor Perruzza, rising on a Point of Privilege, stated that he was so sorry for his remarks about Councillor Pasternak and he has withdrawn them.

GL7.15 - Update on the City of Toronto Municipal Code Chapter 545, Licensing of Payday Loan Establishments

Decision Type:
ACTION
Status:
Amended
Wards:
All

Public Notice Given

Committee Recommendations

The General Government and Licensing Committee recommends that: 

 

1.  City Council direct the Executive Director, Municipal Licensing and Standards, notwithstanding the current provisions in the City of Toronto Municipal Code Chapter 545, Licensing, to immediately cease issuing new licences to payday loan establishments in the City of Toronto.

 

2.  City Council require all payday loan establishments in the City of Toronto to provide City-sanctioned information on credit counselling services.

 

3.  City Council request the Executive Director, Municipal Licensing and Standards, to report to the General Government and Licensing Committee at its meeting on January 6, 2020 on the following:

 

a.  options to restrict advertising from payday loan establishments in the City of Toronto;

 

b.  the feasibility of creating a minimum separation distance between payday loan establishments and between payday loan establishments and schools; and

 

c.  the feasibility of establishing a process for the local Councillor to object to the relocation of a payday loan establishment within the same ward.

 

4.  City Council request the Province of Ontario to limit the annual interest rates for all payday loans to 30 percent annually.

 

5.  City Council request the federal government to:

 

a.  require chartered banks to have branches in low-income neighbourhoods which offer credit lines to low-income people at the same rates they offer to other customers;

 

b.  create a national database of payday loan establishment users to stop users from taking out loans to pay off other loans;

 

c.  cap all payday loan fees at $15 on every $100 loaned; and

 

d.  amend the Criminal Code of Canada to lower the maximum interest rate from 60 percent to 30 percent.

 

6.  City Council forward the report (August 28, 2019) from the Executive Director, Municipal Licensing and Standards, to the Association of Municipalities of Ontario and the Federation of Canadian Municipalities.

Origin

(August 28, 2019) Report from the Executive Director, Municipal Licensing and Standards

Summary

On April 24, 2018, Toronto City Council adopted interim regulations for payday lending by creating a new business licence category and limiting the number and location of establishments to stop their proliferation. The number was limited to the payday loan establishments licensed by the province in each of the City's 44 wards as of May 1, 2018, a City-wide total of 212 locations. City Council also limited the location of payday loan establishments by prohibiting the establishments from relocating on, or within, 500 metres of Woodbine Racetrack.

 

Since the introduction of the payday loan licence, a total of 187 establishments have obtained the payday loan licence. The remaining establishments that were eligible for licences have since decided to close their businesses, move their services online, or merge with existing establishments. As licensees are not permitted to sell or transfer their businesses, this attrition means that the limit on the number of establishments in Toronto has decreased from 212 to 187.

 

This report recommends maintaining the regulations established in 2018 and updating the licensing regime to reflect the new 25-ward structure. If adopted, the City-wide total number of establishments permitted would remain unchanged, but the number permitted in each ward would be limited to the number operating in each ward, as of January 1, 2019. It is also recommended that a process be created to allow a payday loan establishment to apply for permission to move outside of a ward, in order to ensure a degree of flexibility should external factors influence the relocation of a payday loan establishment.

 

Staff do not recommend further restrictions on where payday lenders are permitted to operate. While limiting the availability of payday loan establishments may reduce the likelihood of predatory lending, it does not address the consumer's need for credit, as consumers typically access payday loans for emergency situations and for necessary expenses such as car repairs, rent, or utility bills. This report recommends that Social Development, Finance and Administration, Economic Development and Culture, and Toronto Employment and Social Services, in consultation with Municipal Licensing and Standards, consider as part of the Toronto Poverty Reduction Strategy, initiatives to promote lower-cost financial services.

 

This report was written in consultation with Social Development, Finance and Administration, Economic Development and Culture, Toronto Employment and Social Services, City Planning, and Legal Services.

Background Information

(August 28, 2019) Revised Report from the Executive Director, Municipal Licensing and Standards on Update on the City of Toronto Municipal Code Chapter 545, Licensing of Payday Loan Establishments
https://www.toronto.ca/legdocs/mmis/2019/gl/bgrd/backgroundfile-136987.pdf
(August 26, 2019) Report from the Executive Director, Municipal Licensing and Standards on Update on the City of Toronto Municipal Code Chapter 545, Licensing of Payday Loan Establishments
https://www.toronto.ca/legdocs/mmis/2019/gl/bgrd/backgroundfile-136660.pdf
Attachment 1 - Payday Loan Establishment Locations with the 25-Ward Model
https://www.toronto.ca/legdocs/mmis/2019/gl/bgrd/backgroundfile-136722.pdf
(August 27, 2019) Public Notice - Update on the City of Toronto Municipal Code Chapter 545, Licensing of Payday Loan Establishments
https://www.toronto.ca/legdocs/mmis/2019/gl/bgrd/backgroundfile-136735.pdf

Speakers

Allister Kyle, Cash 4 You Corporation, on behalf of the Canadian Consumer Finance Association
Jim Burnett, PathwayGroup Inc., on behalf of the Canadian Consumer Finance Association
Bob Murphy, Toronto Association of Community Organizations for Reform Now (ACORN) and The Stop Community Advocacy Office
Glenn Appelman, Toronto Association of Community Organizations for Reform Now (ACORN)
Derek Moran
Diane Dyson
Nelson Belchior, Pay2Day Inc.
Steven Martins, Pay2Day Inc.

Motions

1 - Motion to Amend Item (Additional) moved by Councillor Paul Ainslie (Carried)

That the General Government and Licensing Committee delete Recommendations 1, 2, 3, 4, and 5 in the report (August 28, 2019) from the Executive Director, Municipal Licensing and Standards, and adopt instead the following:

 

1.  City Council direct the Executive Director, Municipal Licensing and Standards, notwithstanding the current provisions in the City of Toronto Municipal Code Chapter 545, Licensing, to immediately cease issuing new licences to payday loan establishments in the City of Toronto.

Vote (Amend Item (Additional)) Sep-04-2019

Result: Carried Majority Required
Total members that voted Yes: 5 Members that voted Yes are Paul Ainslie (Chair), John Filion, Jim Karygiannis, Josh Matlow, Frances Nunziata
Total members that voted No: 1 Members that voted No are Stephen Holyday
Total members that were Absent: 0 Members that were absent are

2a - Motion to Amend Item (Additional) moved by Councillor Paul Ainslie (Carried)

That:

 

1.  City Council request the Province of Ontario to limit the annual interest rates for all payday loans to 30 percent annually.

Vote (Amend Item (Additional)) Sep-04-2019

Result: Carried Majority Required
Total members that voted Yes: 5 Members that voted Yes are Paul Ainslie (Chair), John Filion, Jim Karygiannis, Josh Matlow, Frances Nunziata
Total members that voted No: 1 Members that voted No are Stephen Holyday
Total members that were Absent: 0 Members that were absent are

2b - Motion to Amend Item moved by Councillor Paul Ainslie (Redundant)

That the General Government and Licensing Committee:

 

1.  Delete Recommendation 1.e. in the report (August 28, 2019) from the Executive Director, Municipal Licensing and Standards.

Vote (Amend Item) Sep-04-2019

Result: Carried Majority Required
Total members that voted Yes: 5 Members that voted Yes are Paul Ainslie (Chair), John Filion, Jim Karygiannis, Josh Matlow, Frances Nunziata
Total members that voted No: 1 Members that voted No are Stephen Holyday
Total members that were Absent: 0 Members that were absent are

2c - Motion to Amend Item (Additional) moved by Councillor Paul Ainslie (Carried)

That:

 

1.  City Council require all payday loan establishments in the City of Toronto to provide City-sanctioned information on credit counselling services.

 

2.  City Council request the Executive Director, Municipal Licensing and Standards, to report to the General Government and Licensing Committee at its meeting on January 6, 2020 on options to restrict advertising from payday loan establishments in the City of Toronto.

 

3.  City Council forward the report (August 28, 2019) from the Executive Director, Municipal Licensing and Standards, to the Association of Municipalities of Ontario and the Federation of Canadian Municipalities.


3a - Motion to Amend Item (Additional) moved by Councillor Paul Ainslie (Carried)

That:

 

1.  City Council request the federal government to:

 

a.  require chartered banks to have branches in low-income neighbourhoods which offer credit lines to low-income people at the same rates they offer to other customers; and

 

b.  create a national database of payday loan establishment users to stop users from taking out loans to pay off other loans.


3b - Motion to Amend Item (Additional) moved by Councillor Paul Ainslie (Carried)

That:

 

1.  City Council request the federal government to:

 

a.  cap all payday loan fees at $15 on every $100 loaned; and

 

b.  amend the Criminal Code of Canada to lower the maximum interest rate from 60 percent to 30 percent.

Vote (Amend Item (Additional)) Sep-04-2019

Result: Carried Majority Required
Total members that voted Yes: 5 Members that voted Yes are Paul Ainslie (Chair), John Filion, Jim Karygiannis, Josh Matlow, Frances Nunziata
Total members that voted No: 1 Members that voted No are Stephen Holyday
Total members that were Absent: 0 Members that were absent are

4 - Motion to Amend Item (Additional) moved by Councillor Frances Nunziata (Carried)

That:

 

1.  City Council request the Executive Director, Municipal Licensing and Standards, to report to the General Government and Licensing Committee at its meeting on January 6, 2020 on the feasibility of creating a minimum separation distance between payday loan establishments and between payday loan establishments and schools.


5 - Motion to Amend Item (Additional) moved by Councillor Frances Nunziata (Redundant)

That the General Government and Licensing Committee amend Recommendation 1.e. as follows:

 

Location Change Process

 

e.  Authorize the Executive Director, Municipal Licensing and Standards, in consultation with the local Councillor, despite the cap on the total number of payday loan establishments permitted in each ward, to consider and decide the deletion of a location in one ward and its replacement with a location in another ward. The application will be considered and may be deemed approved if the following conditions are met:


6 - Motion to Amend Item (Additional) moved by Councillor Jim Karygiannis (Carried)

That:

 

1.  City Council request the Executive Director, Municipal Licensing and Standards, to report to the General Government and Licensing Committee at its meeting on January 6, 2020 on the feasibility of establishing a process for the local Councillor to object to the relocation of a payday loan establishment within the same ward.

Source: Toronto City Clerk at www.toronto.ca/council