CAPRA Holds Press Conference with City of Red Deer

On Friday, May 27th, CAPRA held a press conference on the steps of Red Deer City Hall. Also in attendance were Mayor Tara Veer and Councillors Paul Harris and Ken Johnston.


Community Mobilizer Danielle Klooster stated:

Today, the Central Alberta Poverty Reduction Alliance, or CAPRA as we’re known, is pleased to announce that on Wednesday evening, May 25th, Bill 15: An Act to End Predatory Lending, passed third reading in the Alberta legislature.

Payday lending, an industry that morphed out of the pawn industry, offers short-term, high risk loans at very high rates of interest, with additional fees. The target market of payday lenders are primarily vulnerable Albertans, which include the street involved population, single moms and the working poor.

It’s important for us to state that the business done in payday lending stores is a voluntary transaction; users are seeking out a short-term loan of this nature. It’s also important to understand that payday lenders are providing a service because there is a gap in the credit market, and banks typically do not have programs to serve the hard-to-bank, or those with low or no credit standing.

However, until this legislation comes into effect, Alberta has had some of the most relaxed rules for payday lenders in the country. This unconstrained regulatory environment meant that payday lenders were able to maximize their profit potential on the backs of people with limited options and urgent needs. While CAPRA supports the business community and works to encourage economic prosperity, we recognize that we are all members of community together, and none of us win if any one sector is engaging in exploitive practices that exacerbate the financial disadvantages of those among us who can least afford it. A responsible regulatory environment for the payday lending industry is one piece of the larger puzzle, in which we must all work together to ensure that people in Central Alberta can see to their basic needs without resorting to tactics that do more harm than good.

This changed legislation includes changes that:

  • Reduce borrowing fees from $23 to $15 per $100 borrowed, making it the lowest rate in Canada;
  • Allow borrowers to repay loans in instalments, rather than all at once;
  • Require lenders to refer borrowers to financial literacy resources;
  • Prohibit lenders from directly soliciting potential customers;
  • Include all fees in calculating cost of borrowing
  • Prohibit lenders from charging a fee to cash a cheque for a payday loan;
  • Prohibit lenders from soliciting, negotiating or concluding an agreement for another form of credit with a borrower while a payday loan is outstanding.

The next steps, now that the legislation has passed third reading, include the giving of royal assent from Alberta’s Lieutenant Governor, and then the generation of regulations.

CAPRA looks forward to seeing the changes come into effect, and to working with the financial sector, through our Financial Literacy Action Committee, to find better ways to meet the needs of our vulnerable populations.

Mayor Veer also spoke about the City’s satisfaction with the “measured response” of the Provincial Government, and said that “we all have a responsibility to care for the vulnerable people in our community.”

Councillors Harris and Johnston, who presented a notice of motion on payday lending to City Council in the fall of 2015, were both delighted with this new legislation as an “important first step” in protecting people from predatory practices, and expressed the need for key community stakeholders, which includes the financial sector, to come together and work to provide alternatives and education.


Danielle Klooster was also a guest on 630 CHED’s Ryan Jespersen Show last week, where she participated in a panel that included a payday lender, and will appear on Alberta Prime Time sometime next week.

For more information about payday lending, Bill 15, or CAPRA, contact us at info @