Downtown Sudbury to get its 3rd payday loan store

Downtown Sudbury is set to get its third "payday" loan store. The businesses are known to offer high interest, short-term loans and cheque cashing services.

But some are worried what effect these stores will have on low-income people.

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Credit counselor David Reynolds of Reynolds and Associatessaid he sees clients on a daily basis who have relied on these businesses to help pay off debt.

"They're turning to these places because they're in crisis," he said.

"They're short on their rent, [have] no grocery money this month, the car broke down [and have to] get to work."

Nicole Beaulieu of the Sudbury Workers Education and Advocacy Centre said she's advocating for employers to pay workers a living wage of $16.18 per hour.

"It just allows people to be able to live a decent, healthy life," she said.

"Hopefully then, no one would need to access these pay-loan establishments because they would be able to afford the necessities that they need to live."

The CBC did make a call to the newest pay-loan store, called Cash For You, but did not hear back.

But according to the Canadian Payday Loan Association's website, it says "members abide by responsible industry practices and ensure customers make the best financial decisions."

Nevertheless, Reynolds said he's worried about people in vulnerable financial situations.

"If you look at the clientele, it's somebody with a retail job, somebody on a fixed income, somebody that has a very low amount of income coming in a month that is in a crisis," he said.

"Obviously, if they could go to the bank and get a 10 per cent interest loan, they would have done that and they can't."

Reynolds advises people to regularly set money aside from income, in case of future financial problems.

Meanwhile, the province is looking for opinions on how much borrowers should pay for a payday loan. Right now, the maximum cost in Ontario is $21 per $100 borrowed. Other options being proposed by the government are $15-$19 per $100 borrowed.