Mr. Speaker, I am pleased to stand this morning to put a few comments on the record where this important public business is concerned.
I am particularly pleased to offer some thoughts on the bill and to support it given the journey I have been on over the last nine months across this province to speak with people in the communities about the issue of poverty. I have spoken with some of our more at risk and marginalized citizens about some of the challenges they face as they try to get on with their lives, buy the essentials, pay the rent, feed their kids and deal with the ever-changing financial circumstance that they find themselves in as governments cut programs, the economy changes and housing becomes more difficult to access while looking after children becomes a greater challenge.
At this time in our country we have these payday loan operations setting up in neighbourhoods all across the country. They are on every corner in the downtown area of most communities. The bill today tries to provide some regulation and direction.
The question we all need to ask is why people find themselves so desperate these days that they need to turn to lenders of this sort that charge the high rates of interest that we see in these instances.
As a party we have begun to focus, directly and in a disciplined way, on the whole question of fairness in our country at the moment. Why is it that those who are well off, well placed and have lots of resources at their disposal can get all the services they need to manage their lives while those who are less well off, have fewer resources or are less connected need to beg, borrow and steal? They are the ones who need to look really hard to find institutions that will actually lend them the money they need and will work with them around some of their needs. A large discrepancy exists there.
Why is it that our banking system, which was put in place, I believe, in partnership at one time with financial experts, governments and institutions interested in this public business and who were there to serve all of us, has come to a point where in many communities the only vehicle left for banking is either an ATM that charges people $1.50 or $2.00 to use it, or to go to payday loan operations which people, more and more, are flocking to as life unfolds.
It seems to me that somewhere along the line we have missed the ball. We have allowed our banks to become institutions that are no longer charged with the responsibility to service all of us who live, work and raise families in Canada and who try to keep body and soul together in communities in this wonderful country. The banks have become institutions of big investment and of very complicated financial dealings. They are less and less interested in the actual reason that banks were set up in the first place, which was to be a place where we could take the money out from under our beds and mattresses and put it some place where it could be dealt with in an organized and responsible fashion and given back to us when we need it.
The banks, in turn, were allowed to lend that money at an interest rate that would create some profit for them. They could invest it in ways that would allow them to continue to develop ways to be of service to us. Alas, that is not the case anymore.
The big banks are closing down branches all across the country and fewer services are being made available within the existing branches by way of tellers who we can walk up to, speak to and get advice from and by way of the hours of these branches. More and more people are being pushed out of necessity to access the payday loan operations. We in this place need to look at that.
What are we doing to challenge the banks to be more helpful? As I cross the country I talk to people about the emerging and very difficult circumstances of poverty in which many people live. The poor, oftentimes, cannot even open a bank account in some of the larger banking institutions. They need bank accounts to cash any cheques they might receive from government or from work they do but which pays them so little that the banks are not interested in their business.
We need to challenge banks in a way that will once again make them interested in the little accounts that so many of us, when we were younger or starting out, had at our disposal so we could write cheques or access loans whenever we needed them to maybe buy a house, a car or pay for our children's educations.
Literally hundreds and hundreds of people in every community I have visited, from Vancouver to Toronto, Calgary to Victoria, Castlegar to Penticton and Hamilton, are saying that because they cannot access these banking institutions, they cannot open a bank account and, therefore, cannot take advantage of the services those institutions are supposed to provide to all of us. In turn, they must now turn to the payday loan operations, the loan sharks who are all over the place in this country.
People who are paying those exorbitant interest rates for that money are finding themselves going deeper and deeper into debt to a point where they lose all hope of ever getting out of it without some serious and significant help from government and from those of us in communities who actually care.
It is good that we are here today and for the last while in this place discussing this issue because I actually do not know what people who are forced to access some of these service would do if these services were not available to them, which flies in the face of some of the comments that some of my own colleagues and people from every party have put on the record here over the last few days where this piece of business is concerned.
They are institutions that take advantage of people by charging these very high interest rates. However, on the other hand, I do not know where some of these people would go if they were not there.
It is good that we regulate. Some in that industry have asked for regulation because they do want to provide a service. They do want to act in good faith and to be controlled. They want control over those rogues in the industry who would give everybody in that industry a bad name and who are some of the people who are pointed to here and talked about in such derogatory terms, as I have listened to the debate.
However, if we, as a Parliament, are not going to take the banks to task and work through regulations concerning those institutions to actually provide to all Canadians the kinds of services that they need to manage their financial affairs, those who are most in need of those services, the most at risk and marginalized of our citizens, then I guess we need to look at where they are going for those kinds of services and ensure they are not again being abused.
That is why I stand today with my colleagues in the NDP, looking for fairness for families, working people and the at risk and marginalized across this country, asking that we at the very least bring the provincial governments in on this and that all of us find ways to regulate so that when people are desperate for money to cover the cost of the very basic elements of their lives they have some protection. We should not yet again, if only by default by not engaging ourselves in this kind of work that puts in place a protective regulatory regime, let down some of our neighbours, friends, family members and citizens across this country. We must make sure they are protected.
There is a bigger challenge, as I have already said, as far as this issue is concerned. As for accessing financing services and allowing people to have the ability to cash cheques quickly and to access small loans when they need them, we need to take a longer and harder look at the regulations that govern the banking industry in this country.
We have heard about the banking industry over the last few years as we or the government have tried to put on the brakes and pull back on the reins a bit as banks turn their attention to the international banking scene more and more and want to do mergers with other banks in other jurisdictions so that they can become even more engaged and involved in that higher level of financial activity. In doing so, they are forgetting the very basic reason that they were put in place.
I also want to say a word in support of an institution that is actually working very hard to try to pick up some of the slack, to fill some of the void, to paper over some of the cracks in the safety financial net that is out there: the credit unions of this country. These are institutions that in some instances were put in place, I would guess, because of the experiences of ordinary working men and women in this country in dealing with banks. To try to manage their own financial affairs, they came together, pooled their money and formed credit unions. All of us probably have at least two or three credit unions in our own communities, if not more.
In my area, in many of the small towns that I represent, where the large banking institutions have pulled out their branches, the credit unions have moved in. In some instances, they have taken over the buildings that the big banks were in and are now providing financial services. I want to give praise and great credit to our credit union system across this country, which, more so than the chartered banks, seems to understand why it was set up in the first place.
All credit unions have a board of directors made up of people who live in those communities. They hear very readily and regularly from their neighbours and friends as to what services are needed. They try as best as they can to fill that void. Alas, though, they cannot be everywhere. At the very least they have to cover their costs, and they have to try to put away some reserves for a rainy day or when a bad economy hits a particular community so that they can be helpful.
The credit unions provide the kind of service, and more and more of it, that is needed by the ordinary working man and woman and the ordinary working family in this country as they look for fairness and for access to services, because the big banks, frankly, are moving out of that business.
As well as regulating, we need some of these services that always will pop up when there is a demand. It is the nature of the market. It is the nature of our economic system and our political climate: where there is a need, somebody will come forward and fill it. I dare say that the reason some of these payday loan operations are doing the kind of brisk business that they are, and in many instances actually hurting and gouging people with very high interest rates that some folks will never be able to pay off or get out of, is that the big banking institutions in this country, which originally were set up to service all of us, have walked away in many ways from the ordinary man and woman in this country, particularly those who are marginalized and at risk.
These big institutions have done this at a time when they are paying their top executives exorbitant salaries. Top executives are getting million dollar paydays. At the end of every year, we hear banks announcing ever increasing profits. All told, for all of the banks together, I think it was $19 billion last year in record high profits.
We have to wonder about it. Even while banks make all of this money, there is the temptation to make even more of a profit next year because that is the way the economy seems to work these days. It is not acceptable any more for a corporation or a business to simply make a profit like it used to. They have to make more profit than the year before and it has to be at a bigger percentage or else the leaders of that corporation or business are deemed to have somehow been unsuccessful in giving leadership.
Corporations, like banks and others, have the onus on them to improve their profits every year, and we have to ask, where are they going to get their profits from? Alas, I guess they can ask the rich and powerful to contribute only so much, and then they turn to their workers in many ways. As we know, some of the ordinary men and women who work in banks are not making huge salaries. They are not even allowed to unionize, it seems, although attempts have been made. So banks get their profits from their workers in terms of not paying them the decent salaries that, given the work they do, I think they deserve, and then they turn to us. For ever greater contributions, through some of the fees they charge, for example, at the ATM machines, they turn to those of us who work for a living every day, who look after our children, pay our mortgages and participate in the local economy.
It is hard to believe that some folks in our society cannot access these services because they just do not have enough money. These folks are then forced to turn to the loansharking industry and, in this instance, the payday loan operators that exist in all of our communities. They have no other choice, so it is important that we regulate these industries.
As I said, we cannot forget for a second that there is a bigger problem and a bigger challenge here and that is how a government charged with leadership can challenge those larger financial institutions that are not living up to their responsibilities or the understanding that all of us have around what it is that they should be providing in the way of financial services.
That would be my message this morning to those who are listening and to those who will be participating in the furtherance of this legislation as it goes to committee, works its way through that process, and comes back to this place so we can get on with protecting families, those who are most at risk and marginalized and regulate this sector of our financial world.
To wrap up, it is good that we are regulating this industry. The industry itself is asking for it. We need to make sure that we make strong and effective regulations. On the other hand, we need to also challenge the banks to do their job effectively. We need to encourage credit unions to expand into other jurisdictions across this country so that people do not have to turn to these lending institutions as a last resort.
