In the book Why the Poor Pay More, Gregory Squires discusses how predatory lending occurs via pawnshops and payday loans. Now, it looks like Alberta will begin putting controls on the fees and interest rates that payday lenders charge ("Alberta trgets payday lenders," Calgary Herald, May 18, 2009).
In some cases these lenders charge as much as 60% (once fees and interests are calculated and included into the short-term nature of the loan). While these services are of value to those who use them (many low income people can't access more familiar types of credit), the high rates of interest charged by these lenders impose significant costs on these individuals.
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