Paul Wilson: Welcome to Hamilton – Payday Loan Heaven

Forget our story of donuts-born here. And this “City of Waterfalls” campaign. This city has a new claim to fame.

Welcome to Hamilton, payday loan heaven.

Maybe you thought we had enough already. Money Mart, Cash 4 You, Cashmax, Speedy Money, Cash Money, Cash Store, Money Direct. The city center is particularly blessed. There is another one every few steps.

They are spread throughout the lower town, as far as Stoney Creek. And the Mountain is doing well too.

Taco Bell crashes in Dundurn and Main, and Cash Money prepares to take the turn. (Paul Wilson / CBC)

But the western end of town is lagging behind. It’s about to change.

The intersection of Main and Dundurn is important, used by 30,000 vehicles per day. This is a main entrance to the heart of Hamilton off the 403.

Taco Bell understood this and built a new restaurant 20 years ago. They put extra effort into the construction, even added a steeple. But fast food is a tough business. Sales fell, as did the building.

The bell tower has disappeared. And suddenly as reported here even last fall, Taco Bell too. The building has been empty since.

They even have a mascot

But now there are new banners in the windows: Cash Money Opening Soon.

MoneyMart is king, with over 460 stores across the country – 13 in Hamilton. But Cash Money – the chain with a furry mascot named Cash-A-Roo – is no slouch.

Go to their website, enter your Hamilton zip code and you will get this message: “Congratulations! We have 20 stores near you! But only five of them are in Hamilton – hence the race to catch up with the competition.

If Cash Money remits $ 300 for 14 days, it will charge you $ 60 in interest. Measuring interest the same way you measure your car loan or mortgage, this works out to a rate of around 520%.

With 13 stores in Greater Hamilton, Money Mart is never just a stone’s throw away. But they have a lot of competition in this loan-hungry city. (Paul Wilson / CBC)

There has been no response from Cash Money as to when exactly the doors will open in the old Taco Bell – or why they thought it would be a good location.

But maybe any old corner is good. Payday loans are a $ 2 billion business in this country.

A Statistics Canada report said 10 percent of young families had obtained a payday loan. It’s not hard to believe that with our poverty levels the numbers are higher in Hamilton.

Pay your mechanic

There is a Canadian Payday Loans Association. And the president is none other than former CHCH journalist and Liberal MP Stan Keyes.

He has been in that position for seven years and believes that payday loans really help people in trouble – an electric bill that needs to be paid, for example, or an unscheduled car repair.

And the industry isn’t the cash windfall many believe, Keyes says. There are, after all, bad debts to cover. Yet all of these new stores are telling you something.

The Canadian payday loan industry began in the early 1990s. Before that, Keyes says, people had few options.

There are cheaper ways to borrow a few hundred dollars for a few weeks. (Financial Consumer Agency of Canada)

“Maybe they had to take their TVs to the pawnshop,” he says. “Or borrow from family or friends. Or go to the pool hall and get money from someone who gives them a contract involving physical damage.”

But there are other options. The Federal Financial Consumer Agency of Canada lists several full payday loan report.

If you needed $ 300 for a few weeks it said, see if there is a way to borrow on a line of credit from the bank. Or get overdraft protection on a bank account. Or get a cash advance on a credit card. These options cost $ 6 or $ 7, not $ 60 or more.

And these are reasonable alternatives, because payday loan customers must already have a relationship with a bank. They will usually be asked for a bank statement, a pay stub, a blank personal check.

There are a dozen states in the United States where payday loan stores do not work. They don’t exist in Quebec either, because of the province’s restrictive interest rate cap.

But here in Hamilton, Ontario, land of plenty, the government’s hand is not that heavy. Look for a payday loan store down your street soon.

[email protected] | @PaulWilsonCBC

Read more CBC Hamilton stories by Paul Wilson here.