On November 3, the Alberta legislature passed Laurie Blakeman’s Motion 511, which reads, “Be it resolved that the Legislative Assembly urge the Government to introduce legislation to establish a ceiling for the daily accrual of interest on payday loans.”

The motion’s passage means that the Assembly as whole wants the government to curb the sky-high interest rates charged by payday loan companies.

A payday loan is an expensive, short-term loan offered by a number of private companies in Alberta. Such loans must be paid back by the borrower’s next paycheque.

Many low-income Albertans use such services, and under current rules can quickly find themselves in bad financial straits if they find themselves taking out payday loans on a regular basis. A Statistics Canada study shows that young, low income families who fall behind on paying their bills are those most likely to use payday loans. But if such families roll over their payday loans - that is, take out another loan to pay the first, then another to pay off the second, etc. - they can find themselves paying interest ranging from 335 to 650 percent.

The Alberta Liberal motion calls for:

a cap on interest rates charged at payday loan companies, and;

lower interest rates for Albertans who collect EI or social assistance.

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