The province is launching a strategy to help Manitobans make informed decisions about managing their finances and avoiding debt. This announcement was made by Family Services and Consumer Affairs Minister Gord Mackintosh.
“We want Manitobans to understand their options so they make informed financial decisions when they spend, save and invest while avoiding the crippling cycle of debt,” Mackintosh said. “We adopted tough new rules for payday lending last fall and have essentially the lowest fees in the country, but we want to help people find other ways to make ends meet.”
The strategy includes rules for payday lenders as part of Let’s Make A Better Deal, Manitoba’s five-year strategy for stronger consumer protection, introduced last fall. The rules now include a special $500 levy on the 85 payday lending outlets in Manitoba that will fund financial education. The annual contributions to the Financial Literacy Fund are expected to be $42,000, Mackintosh said.
The minister noted some people do not feel comfortable dealing with traditional lenders such as banks and credit unions and many borrowers don’t realize the high costs of payday loans, especially with respect to repeated loans. There may be other ways to access cheaper, short-term funds, such as lines of credit and overdraft protection and consumers need to be made aware of these options.
In the first year, the Financial Literacy Fund will:
• help fund a two-day think-tank this fall on viable, accessible and local options for basic banking and credit services;
• support community-driven education, building on successful efforts such as counselling and local workshops that currently work to improve financial literacy, prioritizing outreach to payday borrowers; and
• develop and launch Let’s Make A Smarter Deal awareness campaign about such issues as payday borrowing, debt settlement, fraud and tax services.
The new Financial Literacy Fund aligns with the priorities of ALL Aboard, Manitoba’s poverty reduction and social inclusion strategy, Mackintosh said. It also complements the recommendations made last week by Canada’s Task Force on Financial Literacy for “urgent action” to strengthen Canadians’ financial literacy.
