Calgary council votes to restrict payday loan operations

Payday-loan operators won't be able toclusterin 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 mirrorsregulations 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 operatewithin 300 metres.

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

Speakers at council on Monday highlighted the cycleof debt that often traps those who use payday-loan services, whichcharge highinterest rates.

Mike Brown, public policy co-ordinator with local organization Momentum, cited statistics that say 22per centof 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 saidthe lenders"actually are counter-productive to the poverty-reduction strategies going on in this city."

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