VANCOUVER – British Columbians are more likely to use payday loan services than residents elsewhere in the country and that worries Canada’s largest community credit union.
Vancity has issued a report showing the payday loan industry is thriving in B.C., and use of the high-fee loans has climbed 58 per cent between 2012 and 2014.
Over that same period, the report finds the number of people with more than 15 payday loans leaped over 600 per cent as users increasingly relied on the service for necessities.
The credit union notes B.C. has a soaring cost of living, along with the highest rate of working-age people living in poverty, and says those factors may contribute to the sharp increase in the loans.
According to the study, 198,000 people — about 5.5 per cent of adults in B.C. — used payday loans, compared with 5.4 per cent in Alberta and Saskatchewan, just over four per cent in Ontario and a low of 3.89 per cent in Manitoba.
Regulations in B.C. restrict service charges to 23 per cent of the amount borrowed, but Vancity is calling on the banking industry to improve access to small dollar, lower interest loans to reverse the trend.