Mr. Speaker, this is a day to celebrate. We have reached the end of a long hard process to get some justice in the area of fringe financial services. Today, we are debating the final stage of a bill that will bring us closer to moment when payday lenders are regulated across the country.
Getting here was no easy feat, but it happened after a great deal of work on the part of members of the House. It happened after enormous pressure from community groups across the country. It happened because we found a way to cooperate when push came to shove. I think that tells Canadians everything they need to know on how to make Parliament work, especially in a minority situation.
Here we are today with Bill C-26, at its final stage, that will give provinces a mechanism, a means by which they can regulate payday lenders without leaving it up to a system that has largely failed Canadians over the last decade or more.
With the bill, we have an ability to set aside the Criminal Code pertaining to what is an acceptable rate of interest, that being 60%, so provinces can put in place a regulatory framework to put an end to usurious rates and to lending practices that take advantage of the most vulnerable in our society.
This has come after considerable debate in the House and at the industry committee. General approval and support for the idea has come from all sides, except for the Bloc. Most of us are still trying to figure out the position of the Bloc on this important issue. We know the province of Quebec has a system that works, a system that deals with this matter on the basis of consumer protection. Members of the Bloc feel that the province of Quebec has dealt with the problem of those who prey on individuals through payday lending operations.
Therefore, the question for the House has to be this. Why can we not simply agree among ourselves to get this passed so that all provinces can have some way to protect consumers in the most expeditious way possible? To this day, we are still trying to understand why the Bloc chose to use some methods at committee and in the House to hold up the bill when, at the outset, there was almost unanimous support to have the bill, which is a one paragraph, proceed through all stages as quickly as possible so provinces, waiting with legislation, could do so.
In terms of the Quebec situation, we cannot figure out the reasons for the obstruction from the Bloc members, especially in the context of the Quebec media. Just in the last week or so, when my leader and our caucus spoke out vehemently against the use by banks of what we would consider exorbitant fees at ATM machines, the Quebec media responded and said that it was a silly issue. Le Droit suggested that there were things far worse than ATMs. I will read from Le Droit of January 30 of this year. It says:
Come to think of it, there are things worse than the fees charged for using ATMs...
The article goes on to say:
If he had really wanted to do something for the poor in Canada, the member for Toronto—Danforth would have targeted the some 1,300 financial service outlets such as Money Mart—the payday lenders—that lend small amounts of money to some two million Canadians annually, at such high rates that they are currently being sued in a class action in Ontario.
We have taken both issues very seriously. Obviously we feel there is a real need, and Canadians agree, to put some limits on the fees that banks can charge for accessing one's own money. We have spoken out about the exorbitant fees that Canadians are charged and we have asked the government to consider putting a lid on those charges or, in fact, to eliminate the charges we face to access our own money.
At the same, we have been fighting for years on the question of money marts, rent to owns, payday lenders and all fringe financial institutions. This has been a driving force of members in my caucus over the last four or five years.
I can go back to when we first started raising this years ago. We put forward motion after motion, asking the government to start to take action against payday lenders and those who preyed on people when they were most vulnerable. We worked long and hard to try to get the former government to recognize the need to take action.
I wrote to then minister of finance, now the House leader for the Liberal Party, to ask him to do what Manitoba and other provinces wanted, which was to have provisions to set aside the Criminal Code so provinces could finally take action to put a lid on these usurious fees and to try to deal with the vulnerabilities that people faced as a result of this explosion of alternative financial centres or alternative fringe financial centres in the absence of bank presence. We did not get very far with the previous government.
When the new government came in, we began the process all over again. It took a considerable period of time, but we finally are at the point where we have cooperated, one another in the House. We have developed legislation that would allow the job to be done. Is that not what matters? In the end it is not the politics and the games about how one can hold up the House for other purposes and who initiated what and how it came to be. It is about trying to get something done for Canadians.
This is an example of where the House is making a very significant initiative on the part of Canadians, many of whom are forced to deal with payday lenders and other fringe financial services.
I do not need to go over the statistics, we have had many of these during these debates. We know that just in a decade we have gone from zero payday lenders to over 1,300. We know the stories of people who have lost their life savings. They were in this vicious cycle of going to payday lenders, being taken advantage of and being trapped for the rest of their lives. Story after story portrays this tangled web of payday loans.
I will read one example that came from a number of years ago, back in 2004. It was reported by the Toronto Star. The article begins by saying, “Quick cash, creeping risk 'Pride was what I left behind'”. It says:
Kim Elliott's Friday payday loan ritual that began as soon as her 12-year-old son was off to school.
First stop was the bank to withdraw $700 from the freshly deposited $900 paycheque from her job as a front desk manager at a Windsor hotel.
A short drive away, $650 went to pay off a loan at Stop 'N' Cash, a payday lending store that offers high-interest, short-term loans. As soon as the teller had the cash in her hands, Elliott took out another loan, this time to pay off the interest on a loan at Cash Money, another payday loan store. The transaction was the same there—pay down, loan again, drive to the next lender.
Three hours and three to our loans later, the paycheque was gone. Elliott would then take out about $350 in her final loan of the day, this one to have money to get through the next two weeks.
Does that not say why this day is so important and why Bill C-26 has to be passed as quickly as possible?
It is especially relevant in areas where the banks have abandoned entire communities. Whether one is looking at the question of ATMs or the issue of money marts and payday lenders, the root of the problem is the same: big banks have abandoned communities.
For the purpose of the House's understanding of the issue, I will once again describe what happened in Winnipeg North, my constituency. In the old Winnipeg north end, over a period of half a dozen years, all bank branches closed their doors and left that entire community without access to bank branches.
Yes, there are outlying branches, but we are talking about a community that has a high proportion of senior citizens, a very high level of low income earners, many people with disabilities, people who do not have access to cars or family members to drive them or access to computers and sometimes even telephones to do their banking. What do they do? In the case of trying to get cash, they have to go to a private white label ATM machine and they get charged up to $6 to access maybe $20 or $30, whatever they can afford to take out of their accounts.
People in organizations, like the Bankers Association, and perhaps even some members in this place have suggested that the NDP is ridiculous for raising the question of ATMs and fees. When there is a situation like that, we are not talking about convenience. We are not talking about affluent people who should know better in terms of how much money they take out at one time. We are talking about people who do not have any other choice.
The same holds true when it comes to fringe financial services. The same holds true when it comes to payday lenders. When the banks left, they created prime conditions for money marts, rent to owns and payday lenders. Every aspect of the fringe financial service popped up. It took up the space and filled the vacuum.
People went to those places because they did not have any other choice. There was no place to do their banking. There was no place to access some short term cash without going to a place that charged exorbitant interest rates and all kinds of fees and additional arrangements on top of the 60% interest rate that is criminal.
Something had to be done. We needed a way to get this into the hands of consumer protection departments at the provincial level so regulatory schemes could be put in place to arrive at what would be a reasonable interest rate for these kinds of lending situations. That is exactly what this legislation aims to do and what provinces like Manitoba, which has been the pioneer in this field, aim to do. It is about putting in place a mechanism so one can assess what makes sense in terms of an interest rate.
No one is saying that we cannot look at this in terms of risk and not charge interest. We are talking about short term loans where there is some risk, so there has to be an interest rate structure that is reasonable and allows for people not to lose the shirts off their backs.
However, in that context, why should we allow people to charge a 1000% or $2000% interest rate? Is there not a limit? Is there not something government can do? Is this not the best way to do it, given the fact that we could not over the last number of years get the provinces to agree on one standard? We could not get the federal government to pull those ministers from the provincial and territorial governments together to arrive at one standard. It dragged on for too long, to the point where the provincial NDP government in Manitoba finally brought in legislation of its own that then began this ripple effect where other provinces followed suit.
As we speak today, the Manitoba NDP government and the New Brunswick government have legislation ready to go the minute Bill C-26 is receives royal assent. They are waiting desperately for immediate action by the House. I hope we can get there very quickly, finish this debate, have the vote, get it to the Senate and get it back here, with royal assent.
In the face of banks leaving communities like Winnipeg North, the community had to take charge of the situation. People in Manitoba and in my own community of Winnipeg North finally said that they had been hurt by the banks too many times. They could not seem to hold the banks to account. They could not make the banks come to them with their statements before they shut the doors. They could not seem to convince the banks that there was some merit in having access to personalized banking services in every community across the country.
After 10 bank closures and after trying everything possible, people in the community basically said that they were going to take matters into their own hands and work with the folks who really care about the community to make a difference. That is what happened. It was not necessarily with great help from government, although there was some financial support of course. It was not with the help of any of the banks, although the last bank to close its doors in Winnipeg did give some money for a pilot project to study an alternative financial community services arrangement. That bank did give its building to the community for $1. That has made a difference and we thank the CIBC for that, but the CIBC left a whole community. It abandoned a whole area. Small businesses, local community activists, organizations, many seniors and hard-working families were suddenly left without anything. I think the CIBC actually owed it to the community to do that.
I hope other banks who abandon us will look at that as an example of their responsibilities. I hope they will consider doing so before we have to go to the next step which is to try to bring in what is so workable in the United States, a community reinvestment act which forces banks to carry out their responsibilities to the community and to give something back for the loyalty of consumers over those years. Rather than go that route, I hope banks will start to realize that they have a responsibility to Canadians, to the consumers and clients who built up those banks over the years and made such huge profits for them that the banks owe something to those communities.
Today we have a chance to make up for the downfall, for the failings of a banking system that has ignored consumer concerns. Today we have an opportunity to protect consumers from exorbitant interest rates. Today we have a chance to say to communities that we believe that a community needs to have a say in its own destiny.
The whole origin of the project in Bill C-26 came not from government, although the Manitoba NDP government was vital and central to the whole evolution of this wonderful legislation, but it came from the community. It came from organizations that felt the impact of the banks abandoning them. It came from community activists and research groups who well documented every step of the way what was happening to our community. It is only right that we pay tribute to those studies which documented this problem.
I refer to the work of Jerry Buckland, who is with the Winnipeg Inner-City Research Alliance, and to Nancy Barbour, who came out of the community and worked on this research, who has since passed away, and to whom we owe a great debt of gratitude. They did the study, “The Rise of Fringe Financial Services in Winnipeg's North End”. They put together detailed studies on fringe banking in Winnipeg's North End. Going back to September 2005 there is the paper, “There Are No Banks Here” regarding financial and insurance exclusion in Winnipeg's north end.
The situation in Winnipeg's north end is not peculiar. Many older neighbourhoods, inner city communities and rural communities have gone through the same phenomenon where banks have abandoned the communities and gone to where they say it is more profitable. The banks have left people at the whim of payday lenders and to pay exorbitant fees at ATM machines.
Today we are taking a step to correct this. Today we are actually making a difference in terms of the lives of Canadians. I urge all members of Parliament from all sides and all walks of life to support this bill. Let us get it through the House as quickly as possible so that it can receive royal assent. Let us put into place legislation that makes a real difference for ordinary families.