As a result of changes to the Ontario Payday Loans Act, 2008, and the Municipal Act, 2001, City Council directed staff in the Emergency and Protective Services department to analyze the effectiveness of a municipal licensing regime for payday loan establishments, following a preliminary planning and zoning review conducted by the Planning, Infrastructure and Economic Development department to address the proliferation and clustering of these establishments (see reference below). This overview outlines the scope of the licensing review and provides information on how residents, local businesses, and community organizations can contribute comments to help inform policy options.
A payday loan is a short-term, small value loan in exchange for a future payment, typically to be repaid by the borrower’s next pay cheque. The loan is unsecured, has no guarantee or security on any property, and does not include a margin loan, pawnbroking, a line of credit, or a credit card. Lenders (payday loan establishments) must be licensed by the Province of Ontario and are subject to the provisions of the Payday Loans Act, 2008.
Given that the operational requirements of payday loan establishments are both addressed by and regulated by the Province of Ontario through its own licensing system, the focus of this municipal-level licensing review is to determine whether municipal licensing is necessary for these businesses in order to support potential new land-use planning and zoning requirements. Information on the proposed planning and zoning rules for payday loan establishments can be found in the Payday Loan Establishment Minor Zoning Study.
Potential elements for inclusion in the municipal licensing regime include:
- Requiring payday loan lenders to obtain a municipal business license in order to operate in the City of Ottawa;
- Requiring payday loan lenders to provide proof of a valid provincial payday loans licence under the Payday Loans Act, 2008;
- Outlining methods to establish conformity with proposed zoning and planning regulations, or legal non-conforming rights, for both existing and new establishments;
- Requiring payday loan lenders to conform to applicable City by-laws (e.g. Property Standards and Signage);
- The need for payday lenders to provide additional consumer protection financial information to borrowers who use the service; and
- The creation of licensing fees.
As part of this licensing review, staff are examining industry regulations at the provincial level as well as how other municipalities in Ontario regulate these businesses. This licensing review is being coordinated with the ongoing Payday Loan Establishment Minor Zoning Study.
Providing Input and Comments
The City of Ottawa (Emergency and Protective Services department) would like to receive any comments, concerns, or questions on this licensing review for payday loan establishments. Please forward your comments via mail, telephone, or e-mail to the staff contact identified below by 5 PM on July 31, 2019. Comments received will be considered by staff in the preparation of a staff report and recommendations on a potential municipal licensing regime. This licensing review and staff’s recommendations will be considered at Community and Protective Services Committee in the Fall of 2019.
Please note that providing a comment is voluntary. Any information provided will only be used for the purpose it was collected and will be kept confidential pursuant to the Municipal Freedom of Information and Protection of Privacy Act.
Dated at the City of Ottawa this 2nd day of July 2019
For more information, contact:
Public Policy Development Branch
Emergency and Protective Services
City of Ottawa110 Laurier Avenue West, 2nd Floor Ottawa,
ON K1P 1J1
tel: 613-580-2424 ext 41421