Public hearings are underway in Winnipeg to help Manitoba’s Public Utilities Board determine how much payday loan companies will be allowed to charge Manitobans for short-term loans.

Leo Sorensen was one of the first presenters at the Winnipeg hearings, which began Tuesday.

Sorensen’s Loans Til Payday is based in British Columbia, but operates payday loan outlets across Western Canada, including three in Winnipeg.

He doesn’t believe the government has any place telling him what he can charge his customers.

“The government of Manitoba has taken a very socialist attitude of where they want to go,” he told reporters after his presentation to the board.  “Why are they regulating us? Are they telling Wal-Mart what to charge?”

In his presentation, Sorensen said he charges, on average, about 720 per cent interest annually on short-term loans.
Even so, he said his company made only $20,000 in profit in Manitoba last year. If Manitoba makes it tougher to do business, Sorenson said he would consider closing his stores.

“I’ll be like the gypsy. I’ll pack my bags and go home. It’s just that simple.”

Closing his Winnipeg outlets would mean 10 Manitobans lose their jobs, he said.

It would also be hard on his customers, Sorensen said, suggesting some might resort to stealing to pay bills if payday loans were not available.

“Why do you want the Manitoba government to take the freedom away from industry or business?” he asked. “What message are you sending to the rest of the businesses?”

The 10 days of hearings over the next five weeks are expected to include presentations from a national association of payday lenders — who say they welcome a “fair” cap on their fees — as well as consumers’ groups that claim the industry exploits the poor.

The first hearing was held in Thompson last week — but no one attended. Two people attended a hearing in Brandon on Wednesday, but they did not speak.

After the hearings are complete in December, the board will determine maximum rates that payday loan companies can charge.

Manitoba legislation passed a year ago to regulate companies that offer short-term loans also requires payday loan companies to be licensed and bonded, and gives the Manitoba Consumers’ Bureau the right to inspect them.

The rules prohibit lenders from charging extra “rollover” fees when loans are renewed, extended or replaced by new loans, and give customers the right to cancel a loan without penalty within 48 hours.
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