B.C. laggard in regulating payday lenders

VICTORIA - Everyone - even Solicitor General John Les - agrees the province should be regulating payday lenders to protect British Columbians.
So what won't the government do something?
Payday loan companies were almost non-existent a decade ago. Now there are about 1,350 branches across Canada doing $1 billion in business a year.
Unlike banks and other lenders, the industry is virtually unregulated. The safeguards that protect consumers dealing with other financial institutions don't exist.
The companies serve a useful purpose, despite critics' complaints that exploit the poor. They offer loans to people who have no other access to credit. For someone who urgently needs $100 to make to the next payday - to fix a car, or provide for a child - the companies are a valuable service. Show them a pay stub, write a postdated cheque and you can borrow a small amount for a brief period.
For a price. The Criminal Code makes it a crime to charge more than 60 per cent interest. Typically the companies charge 59 per cent. But they also levy fees for each transaction that push up the real cost of borrowing, in some cases to 1,000 per cent.
The loans can quickly become a trap. Borrow the money against your pay cheque, pay it back and then run short again and go back for another loan. A court case in Ottawa heard that a person borrowed $280. A month later, the amount owing for the original loan had risen to $551, a Tony Soprano kind of transaction.
The companies defend the fees. They run a big risk of not getting paid back, they say, and it's tough to make money on a lot of small loans.
But they agree - mostly - on the need for proper government regulation.  The Canadian Payday Loan Association, which represents operators of about 800 of the 1,350 outlets, has urged governments to step in and set rules for the industry.
The B.C. government says no. When New Democrat MLA Rob Fleming introduced a private members' bill this month to regulate the industry, Les was dismissive.
The bill’s contents are fine, said Les, nothing he could disagree with.
But, Les said, the province can't do anything until the federal government changes the Criminal Code and gives the province the power to set maximum interest rates. Fleming has “the cart before the horse.”
It sounds like an excuse, a lamish one.
It would be helpful if the federal government finally acted on the Criminal Code changes after five years of dithering.
But in the meantime B.C. could act, if it had the will.
The Manitoba government has introduced legislation regulating payday lenders. It acknowledges some provisions require changes to federal law. The fact that Manitoba has passed the legislation and is waiting on Ottawa is intended to add pressure.
But the Manitoba law also introduces useful measures that don't require any federal action. Payday loan companies will be required to warn customers in clear language about the high cost of loans. Borrowers will have 48 hours to change their minds about the agreement. Most importantly, the companies will be required to get provincial Public Utilities Board approval for their fees. Their operations will come under close independent scrutiny.
Many of the same measures were included Fleming's bill.
The Liberals aren't going to adopt an NDP members' bill, but the government could and should bring in its own legislation this fall.
The industry fills a need.
But it can also exploit the vulnerable. If any sector of the financial services industry requires regulation, it's the payday loan operators. Yet governments have largely chosen to ignore them. (Not entirely. Manitoba prosecutors have laid charges under existing Criminal Code provisions; Quebec introduced regulations limiting interest rates and the companies have stayed out of the province.)
The government has acknowledged the need for action. Les has indicated general support for Fleming's bill. B.C. has the ability to start protecting consumers and bring some order to a Wild West industry.
It's time for the excuses to stop and some action to start.
Footnote: The only remedy available to introduced so far has been class action lawsuits. But they are a costly and slow vehicle to bring about change. The amounts claimed are typically small and the base of claimants tough to identify and the legal process could take years.

Liberals choose needless deaths over photo radar

VICTORIA - The Liberal government is putting politics and ideology ahead of saving lives when it comes to photo radar.
The NDP raised the issue in the legislature's last days, asking why the government was refusing to use cameras to catch speeders on the Pattullo Bridge. The old, narrow bridge has claimed five lives so far this year, 15 in the last five years. Speeding is a problem, partly because enforcement is dangerous for police. There's no room to stop speeders.
Surrey council has endorsed photo radar for the bridge. Transportation Minister Kevin Falcon says it might be useful. RCMP want it. ICBC studied the problem and said photo radar is the best way to save lives and reduce injuries.
Forget it, said Solicitor General John Les. The Liberals promised to get rid of photo radar in their in 2001 campaign, and they're keeping the promise even if it does mean people will die in preventable crashes.
It's a curious bit of blind ideology, one that has already cost the lives of some 160 British Columbians.
Look at history. Photo radar was introduced - badly - in 1996. In the prior five years an average 510 people had died annually in car crashes.
During photo radar's almost six years of operation the annual death rate fell to 412 - a stunning drop.
The Liberals killed it weeks after the 2001 election. In the first three years after it was gone the average number of deaths was 449 - an increase of 37 a year from the photo radar era.
It's not surprising. Every study has shown photo radar reduces speeds and crashes and saves lives. The only variance is in how many deaths and injuries it prevents.
A study on photo radar's first year in B.C. found "a dramatic reduction" in speeding where the cameras were used. "The analysis found a 25-per-cent reduction in daytime unsafe speed related collisions, an 11-per-cent reduction in daytime traffic collision victims carried by ambulances and a 17-per-cent reduction in daytime traffic collision fatalities," the study reported.
An exhaustive Australian review released this month analyzed data from 26 separate photo radar studies from around the world. The results were conclusive. The number of crashes was reduced by 14 to 72 per cent once photo radar was installed. More dramatically, fatalities were reduced by 40 per cent to 46 per cent.
Enforcing the speed limits saves lives. (That hardly seems surprising or controversial.)
B.C.'s former photo radar was wildly unpopular. People saw it - with good reason - as an attempted cash grab. They considered some locations unfair. And they questioned the use of police officers in the photo radar vans.
But none of those problems are inherent to photo radar. Introducing a new program would be as simple as installing speed cameras in dangerous locations, like the Pattullo Bridge or problematic school zones or a road used by street racers. Put up a sign saying the device is being used and speed and crashes will fall. (Britain has permanent boxes for speed cameras at high-risk areas; the cameras move from location to location.)
Even the existing red light cameras in place at high-risk intersections round the province could also be used to catch people speeding in the same locations. Surely no one can argue against issuing tickets to people driving 30 kilometres per hour over the limit in a busy intersection?
You can argue that other measures may produce better results, or that speeding laws shouldn't be enforced for some reason. But you can't deny the effectiveness of photo radar. That's why so many jurisdictions - including Alberta - have accepted photo radar. That's why polls show wide support.
It's simply fact that photo radar works. Enforcing speeding laws save lives. Photo radar - or speed cameras - is the most cost effective way of achieving the goal.
It's irresponsible for a government to put politics and ideology ahead of the lives and well-being of citizens.
Footnote: The Liberals have talked a lot about getting tough on crime. But we had about 430 motor vehicle fatalities in B.C. in 2004; ICBC says speed was a factor in 172 of them. There were 112 homicides. But somehow speeding, though deadlier, doesn't get the same government commitment.