Payday loan businesses seem to be popping up all over the place. These businesses offer cash advances based on your income that must be paid back on your next payday. Their clientele are often low-income earners. When I came across an article about a proposed law in Manitoba that is seeking to regulate interest rates in the province as a “crack down” on these businesses, I thought I’d look into this a little myself.

In Canada, it’s a criminal offence to charge an annual interest rate that is greater than 60 percent. That means that if I were to borrow $1000 for one year, the most anyone could charge me in interest is $600 – things get more complicated if the interest is compounded in periods less than year (like monthly) which is usually the case (and you end up paying more), but I’ll ignore that for now to keep it simple. With that information in mind, I headed downtown to check out two payday loan businesses right across from each other in Gore Park – CashMoney and MoneyMart.

My first stop was CashMoney. Attached to H & R Block in downtown Hamilton, CashMoney has a small location with just one cashier. There were no customers when I arrived, so I was able to stroll up to the front counter – protected by a thick bullet-proof pane of glass – and speak with the cashier immediately.

I asked her a few questions about their service. All you have to do is provide a paystub, a bank record, proof of address and some ID. Then you tell them the amount of the advance you’d like and they calculate how much you need to pay back on your following payday. After writing them a post-dated check dated to your next paycheck for the amount you need to pay back, you get your advance. It’s that simple.

I asked her how much I would end up paying in “interest”. Well, she didn’t call it interest and she didn’t call it service charges either. She said, “You pay $22 on every $100 you get advanced.” I asked her again just to clarify – yup, it’s $22 for every $100.

Assuming a standard scenario where you get paid every two weeks, we can work out the annual interest rate easily. Twenty-two dollars per every $100 is 22 percent over two weeks. There are 52 weeks in a year, which works out to 26 two-week periods. Twenty-two percent multiplied by 26 is 572 percent!

Offering a 50% advance on your paycheck…

I grabbed a couple of pamphlets, including one on responsible borrowing, and headed across the street to MoneyMart. There were three cashiers on duty and a lineup. I took a couple more pamphlets and read them while I waited.

The fees for advances were clearly outlined on the pamphlets. To get a fast cash advance, you pay interest at an annual rate of 59 percent (note they come in just under the 60 percent law), which as the pamphlet describes works out to 89 cents per week per $100. Pretty cheap compared to CashMoney, I thought.

But wait – there’s more. As well as the interest, you pay what MoneyMart calls “1st party check cashing fees”. Those fees? $7.99 per check, plus 9.99% of the face value of the check.

So what does that work out to? MoneyMart lets you borrow from $100 to not more than 30 percent of your net pay, up to a maximum amount of $1500. Let’s say you make $1200 net every two weeks. That means they’ll front you 30 percent, which is $360. So if we look at service charges like interest rates, what’s the total interest rate you’ll pay?

It’s a bit more complicated than CashMoney, but here goes. You pay $6.41 in regular interest, calculated at 59 percent over the year. You also pay a flat rate of $7.99 and 9.99 percent of the $360, which works out to $35.96, for a total payment of $50.36. This works out to an annual interest rate of about 260 percent!

I asked the cashier at MoneyMart what would happen if the post-dated check I wrote to cover my advance bounced. “It’s a $35 NSF charge”, she said, “in addition to the NSF charge your bank will charge you. You don’t want to do that!” No, I don’t, and I don’t imagine anyone does. But what about the people who do? Can they afford that tacked on to an already expensive loan?

The cheapest payday loans around aren’t that cheap…

This is what is bothering anti-poverty groups. Harold Dyck, from the Social Planning Council of Winnepeg, as quoted in the article I linked to above:

“It does particularly victimize people in the most desperate of circumstances. The general term they use to describe it is the alternative consumer credit market. It’s a bit of a fancy title for a way of essentially soaking people in poverty and just aggravating their condition.”

Of course, the pamphlets and the advertising for these businesses clearly state that this is for short-term loans only, and in order to belong to the Canadian Association of Community Financial Service Providers, you have to prohibit “roll-overs” – the practice of extending loans or of allowing people to take out a new loan to cover their old one. These conditions sound a bit like the “for tobacco use only” stickers on the bongs at the local hemp shop. Are they taken seriously? And is there anything stopping someone from covering an advance from CashMoney with an advance from MoneyMart?

I called CashMoney to find out, and to see what they had to say about an interest rate for their loans that I calculated at 572 percent annually, far in excess of the legal limit. “Is there anything in place to stop someone from covering a cash advance from CashMoney with a cash advance from somewhere else, like MoneyMart?” I asked. “No,” Heidi explained, “it’s two different companies. There’d be no way we could know that”.

I confirmed with her that CashMoney charges $22 on every $100 advanced, and then explained that I had worked that out to an annual rate of 572 percent. “It’s not interest,” she said, “it’s just a fee.” But isn’t that fee essentially interest under a different name? She was adamant – “it’s not interest. It’s a fee.”

While eating lunch today, I watched a debate on Democracy Now! between someone from Amnesty International and a conservative lawyer who’s held various positions in US Republican governments. The debate, which was fascinating, was about the recent Amnesty International report on human rights, which included criticisms of the United States, especially the “archipelago” of US prisons around the globe, including many secret facilities where people are held incommunicado.

But a part of it made me laugh, right near the beginning (watch the part I mean by clicking here, RealPlayer required), where Bush is giving a press conference and a journalist asks him about the report. The quote that made me laugh:

“They base some of their decisions on the word of…people who have been trained, in some instances, to disassemble – that means to not tell the truth.”

Except that’s not what disassemble means. “Disassemble” means to take apart. “Dissemble” means to lie.

Looks like the catapult misfired on this particular piece of propaganda.

While we’re on quotes, here’s an original that popped into my head today:

“If we really lived each day like it was our last, our last day would come a lot sooner.”

Here’s a quote for ya. George Bush, discussing his plan for Social Security:

“See, in my line of work you got to keep repeating things over and over and over again for the truth to sink in, to kind of catapult the propaganda.”

Reminds one of a famous quote from Lenin:

“A lie told often enough becomes accepted truth.”

They come in all different sizes, shapes and even colours. This is their land and they’ve been here for far longer than we have, but today they are bearing the brunt of modern society’s onslaught of expansion, pollution and destruction. Their numbers are fewer and many are at risk of disappearing altogether.

They’re the native trees and plants of my area, the subject of my first-ever community meeting, entitled “Native Trees and Plants in Your Garden”.

Until now, my gardening hobby has been mostly restricted to growing plants indoors, but since we purchased our first home in downtown Hamilton, I’ve been working on the garden outside. It was a complete disaster when we moved here but it’s improving, slowly but surely. When I got a flyer in the mailbox about this meeting, I couldn’t resist traveling to my local recreation centre to check it out.

Ryerson Recreation Centre is about what you’d expect: brick exterior, interior the same beige paint that adorns the interior of every school and rec centre in North America, posters advertising various community events plastered on the walls. About 15 people showed up, mostly women with a smattering of middle-aged men. I won’t describe the ages of most attendees except to say that when it comes to gardening, there’s no doubt that I’m getting a 30 year head start.

An energetic young woman thanked us for coming and introduced the featured speaker, Paul O’Hara, the owner of a local landscaping business that specializes in native plants. After he was introduced they turned the lights down and he started showing slides of trees and plants in the area. I immediately got off on the wrong foot by asking what he thought of the idea of getting native plants from native habitats, like by digging up or taking cuttings from plants on the escarpment and out in the woods to put in my garden. “Why would you want to ravage the outdoors when it’s ravaged enough already?” he asked me. The elderly woman next to me looked at me disapprovingly. I blushed. He recommended taking their seeds (no more than 10% of them) in the fall and using them instead.

Paul’s activist stance on the environment grew more apparent as he went through the rest of his presentation. After showing many beautiful slides of trees, thickets and gardens (he mentioned that people “ravage” his gardens and steal the plants, I tried to look inconspicuous), he started showing pictures of parking lots, the misnamed Meadowlands complex in Ancaster (a sprawling network of big box stores and parking lots, 99% pure concrete), and then a picture of a towering 170-year-old burr oak in Oakville. “How do I know it’s 170 years old?” he asked. “Because I counted its rings”, he said, flipping the slide and showing the same tree in pieces. “Cut down to make room for more parking at Budd’s Imported Cars”.

There was palpable emotion in the room as these slides flipped past, from the disgust of the burly Burlington arborist to the dismayed wistful sadness of the little white-haired woman in the corner. These images were a sort of public mourning for the sickness of nature. It struck me that so much can be accomplished if you can get people into one spot to speak with them and let them see things. But where is everyone?

As I was leaving a woman approached me and identified me as having just moved into our house on Jackson Street, explaining that she lived across from me. It turns out Pat is an avid gardener who encouraged me to come over to her place and take a look at her garden to get ideas and advice. What do you know – attend a community meeting, meet people from the community. What a novel idea!

P.S. If you’re from the Hamilton area, you can get a free tree planted on your lot’s city property. Just go here.