Payday Loans Revisited

I had intended to update my payday loans story when I heard back from the provincial government and the local Sydney credit union on the subject.

If you read the original piece, you’ll know much of it was devoted to a consideration of pilot projects being tested by credit unions to provide short-term loans to borrowers Payday loan store.with bad credit, i.e. borrowers who now have few options besides payday lenders. I noted that the provinces of Ontario and Alberta are both encouraging credit unions (and in Alberta, all lending agencies) to consider providing such loans and I wondered, naturally, if our own Sydney credit union or our own provincial government were considering any such experiments.

Well, the province is not. Here’s the response I received from provincial communications officer Daniel J. McNeil:

The province has not directly encouraged banks or community organizations to provide short-term, low interest loans. The province licenses, inspects and audits payday lenders to ensure they are complying with all relevant requirements, such as appropriate disclosure of the cost of borrowing, minimum and maximum loan terms and the prohibition on rollover loans. It’s also important to note that banks and credit unions make decisions that align with their goals and business models.

So I guess it comes down to the “goals and business models” of our local credit union. Local community organizer Greg MacLeod wondered about those in a letter to the Cape Breton Post regarding the closure of the Scotsburn dairy. His point was that the credit union should help local businesses, but his words could apply equally well to the issue of helping local people:

Credit unions and cooperatives were organized by local volunteers. Most of them worked very hard without pay because they wanted to improve life for the local people. The present day membership should discuss such issues. We have a responsibility to the founders.

But I can’t tell you whether the credit union agrees with this, or has ever considered providing the kind of short-term loans discussed in my article, because the credit union has yet to respond to my queries. I wrote to them first on 23 August 2016 and my question has bounced from one official to another, but the answer I was promised on 29 August from the manager of lending has yet to materialize.

Still, maybe I’m underestimating them. Maybe they are, even as we speak, discussing ideas for breaking the payday loan cycle. I’d be delighted to hear about them.



Mike Toomey, lending manager at the Sydney Credit Union, has responded to my question. He says he’s been looking into the issue but has yet to find “anything solid.”

At this point we do currently have lending options for smaller amounts that people can apply for and at the Credit Union we do take everyone’s situation case by case with wanting to help being the forefront of our intentions. We always try to go above and beyond to help where regular banks and traditional lenders will decline. That being said there has been talk about these short term loans coming down the line but to date I cannot find any information to give a more specific answer for you hence the delay in response which I do apologize for. When further information is available and I get a better understanding or more details I can be sure to reach out and provide you with an update.

So we’ll stay tuned. In the meantime, I’ll leave you with the “mission statement” of the Sydney Credit Union:

We are a financial cooperative committed to providing programs and services which enhance the economic and social well being of our members and our community.



Photo by Vinceesq via Wikimedia Commons

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