"We support the call for postal banking in communities so people can receive the assistance they need in ways that will help them get out of financial difficulty, not put them further under." — James Clancy, NUPGE National President
Ottawa (05 May 2016) — In a press release, the Canadian Union of Postal Workers (CUPW) and the Association of Community Organizations for Reform Now (ACORN) announced that their members are taking to the streets in Halifax, Montreal, Ottawa, Toronto and Vancouver to call for postal banking as an alternative to predatory payday lenders. For exact locations and times, click here. Postal banking means that post offices would offer financial services such as bank accounts, short term loans and other services. Canada used to have postal banking, and many countries still do, like the United Kingdom.
Payday lenders take advantage of people when banks abandon communities
"Payday lenders have moved in and filled the void left by banks in many communities,” said ACORN Canada spokesperson Donna Borden. “They are filling real needs for small loans and cheque-cashing services, but at predatory rates. It’s loan sharking pure and simple.”
"They take most of your pay and then you owe again. It's a vicious cycle,” said ACORN Canada member Tina Ford. “You're always poorer in the end, but we have to survive somehow so that's why I have to keep going back."
Payday lenders charge anywhere from $17 to $25, depending on the province (with the exception of Quebec), for every $100 borrowed over a 2-week period. Annually that’s an interest rate of 443% to 651%. Industry insiders say close to 2 million people in Canada use payday lenders each year.
NUPGE supports calls for postal banking
The National Union of Public and General Employees (NUPGE) echoes the concerns raised by CUPW and ACORN Canada.
"When we examined the rise of the payday loan industry at the time of financial collapse in 2008 for our Smart Money: Scavengers in the Debt Crisis, we saw how predatory these money lenders can be," said James Clancy, NUPGE National President. "What is the most disturbing is how these stores pop up in lower-income neighbourhoods after the major banks leave. People need financial assistance but payday loans are not a long-term solution."
"We support the call for postal banking in communities so people can receive the assistance they need through means that will help them get out of financial difficulty, not put them further under," said Clancy.
“People need an alternative to payday lenders, somewhere they can go and not be gouged,” said Mike Palecek, National President of CUPW. “A postal bank could be that alternative.”
Postal banking not a thing of the past
“Canada had a postal bank for over a hundred years and over 60 countries still do,” said Palecek. “Postal banking helps keep financial services accessible and postal service viable in many parts of the world, and could here too.”
CUPW and ACORN Canada are calling on the government review of Canada Post to recommend the addition of financial and banking services at Canada Post, or at a minimum, a task force to determine how to deliver new financial and banking services through our postal service.
The National Union of Public and General Employees (NUPGE) is one of Canada's largest labour organizations with over 360,000 members. Our mission is to improve the lives of working families and to build a stronger Canada by ensuring our common wealth is used for the common good. NUPGE