Community partners in Windsor propose education campaign to veer people away from payday loans

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In a move aimed at combatting the financial strain caused by payday loans, the City of Windsor is considering the launch of a comprehensive education campaign to promote alternative financial options.

A report presented to city council ahead of its first meeting of the new year on Jan. 13 outlines a strategy developed by a "cross-sectoral committee" comprising local organizations, including the United Way, the Canadian Mental Health Association, and the John Howard Society.

The committee was formed in response to a council inquiry regarding the licensing of payday loan establishments and the need for educational resources on financial alternatives.

"Alternatives to payday loans remain a niche market with few options for low-income and middle-income borrowers," the report states. "However, organizations in Windsor offer various programs for emergency financial support, budgeting, and debt relief for residents in need."

The report identifies three primary alternatives to payday loans: lower-interest, small-dollar loans offered by financial institutions, local emergency assistance programs that provide one-time funding for crises, and financial education resources aimed at improving budgeting and money management skills.

While some alternatives exist, the report emphasizes that many residents remain unaware of these options.

To address this, the proposed campaign would utilize multiple outreach channels, including social media, community websites, and physical distribution points for educational materials.

The campaign would focus on topics such as budgeting, the pitfalls of payday loans, and available financial literacy opportunities.

"The campaign would also need to counter the significant advertising of payday loan companies to be effective," the report added.

The report also highlights the importance of including voices from the community, particularly those with lived experience of financial hardship.

"Including their voices in the development of the strategy is considered a best practice and will help ensure the messaging is applicable and relevant," the report said, adding the campaign would require dedicated funding to sustain it over time.

"No municipal funding has been approved in the 2024 Operating budget for any of the options discussed in this report."