Canada targets payday lenders as debt levels soar in oil regions

Mon Apr 25, 2016 1:40pm EDT
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* Federal consumer agency investigating industry

* Alberta vows to end "predatory lending"

* Debt counsellors say oil workers turning to payday loans

* Industry says unregulated alternatives are worse

By Matt Scuffham

TORONTO, April 25 (Reuters) - Canadian authorities are stepping up scrutiny of payday lenders over fears they are preying on vulnerable customers at a time of record household debt and rising unemployment in oil-producing regions.

Payday lenders have surged in popularity in Canada with more than 1,400 stores now open, according to the Canadian Payday Lending Association (CPLA). It said around 2 million Canadians a year take out loans meant to tide them over until their next paycheck.

The industry had only a handful of stores when it emerged in the mid-1990s, according to the Canadian government.

Payday lenders have grown in popularity because they offer quick access to cash without the extensive checks that banks make and are prepared to lend to borrowers with damaged credit records who may have struggled to pay back loans in the past.   Continued...