National Report on High Interest Loans

ACORN Canada undertook a study focusing on high interest loans, especially when taken online. For the purpose of the study, high interest loans were defined as loans such as payday loans, installment loans, title loans etc. that are taken from companies/institutions that are not regular banks or credit unions.

The study was conducted to examine the experience of lower-income consumers in the increasingly available online high-cost credit markets.

The study was divided into three phases - conducting a literature review and webscan which was undertaken by Prosper Canada; legislative scan to understand the regulatory framework; and a national survey to capture experiences of people who have taken high interest loans, especially online.



Money Mentors – Savings & Debt Resources

Collection of money management resources, including how create effective budgets, realistic spending plans, deal with your debts, save more money, build a stronger credit rating, and prepare for retirement.



State of Fair Banking in Canada 2020: Borrower and Lender Perspectives

The DUCA Impact Lab defines fair banking as any financial product or service that lives up to the following set of principles:

  • Pricing is clear, transparent, and well understood
  • Pricing is representative of the cost of funds, cost of administration and risk, rather than what the market will bear
  • It is clear to all parties how any personal data is being used by the lender
  • Personal data is only used for purposes agreed to by both the borrower and lender
  • The terms and conditions, including penalties and the rights of each party are clearly explained and well understood by both lender and borrower
  • Products are only recommended that will bring the borrower closer to their expressed goals
  • The borrower is clear on what the institution will do (and not do), with deposits to earn a return
  • The assessment of risk is objective, transparent and not prejudicial
  • Financial institution recommendations are not biased towards in-house product recommendations
  • Products empower consumers when they need access to financial services, not just when they do not

Their Fair Banking 2020 report presents data on the following areas:

  • Debt load and its impact on Canadians
  • Financial confidence
  • Divide between borrowers and lenders
  • How financial products are priced
  • Poor credit and ability to access to financial product and services
  • Demographic snapshot: People of colour and Indigenous Canadians

 



Attitudes Toward Debt and Debt Behavior

This paper introduces a novel survey measure of attitude toward debt. Survey results with panel data on Swedish household balance sheets from registry data are matched, showing that debt attitude measure helps explain individual variation in indebtedness as well as debt build-up and spending behavior in the period 2004–2007. As an explanatory variable, debt attitude compares well to a number of other determinants of debt, including education, risk-taking, and financial literacy. Evidence that suggests that debt attitude is passed down along family lines and has a cultural element is also presented.



Retirement Security and Financial Decision-making: Research Brief

A growing number of retirees are not experiencing the expected gradual reduction in spending after they retire. This report summarizes the findings of a Bureau study into whether people who retired between 1992 and 2014 had the income, savings, and/or non-housing assets to maintain the same level of spending for at least five consecutive years after retiring. The study found that about half of people who retired between 1992 and 2014 had income, savings, and/or non-housing assets to maintain the same spending level for five consecutive years after retiring. In addition, the Bureau found that the ability to maintain the same spending level in the first five years in retirement was associated with large spending cuts in later years. The study helps identify ways to protect retirees from overspending their savings in early retirement.



Debt Relief Options in Canada – Long Term Outcome Comparison

This research report compares the long-term financial outcomes of Canadians, based on a study comparing consumers who used a debt management program (DMP), bankruptcy (BK), or a consumer proposal (CP) to obtain relief from debt.



Bien choisir son crédit : un guide pratique [A Practical Guide to Making Smart Credit Choices]

A guide comprised of 12 fact sheets for consumers to learn more about credit, grouped into the following topics: general information, warnings, credit products, and comparison tables. (Please note this is a French-language resource.)



Review of Financial Literacy Research in Canada: An Environmental Scan and Gap Analysis

The Review of Financial Literacy Research in Canada highlights past and current advancements in financial literacy research (produced by government and non-governmental stakeholders) while identifying existing gaps within the financial landscape. The overriding goal is to help strengthen the financial well-being of all Canadians. The review contains four research priorities: managing debt, navigating the financial marketplace, building savings, and budgeting.



Consumer debt and household vulnerability among low and moderate- income households in Canada 

Household debt levels in Canada have been rising since the 1990s, which poses increasing risks for Canada’s economy and Canadians’ financial health. However, the debt ‘picture’ for an average low- or moderate-income household is likely to be quite different from higher income households, both in terms of amount of debt and type of debt they take on. 

Join Alex Bucik and Vivian Odufrom Prosper Canada in this one-hour webinar where theywe will present findings from recent Prosper Canada’s recent research on consumer debt in CanadaRoadblock to Recovery: Consumer debt of low- and moderate-income Canadians in the time of COVID-19. Alex and Vivian will explore what types of debt are more common in low- or moderate-income householdsand some of the drivers of this debt load.  

This webinar is intended to equip financial educators and frontline practitioners supporting low-income clients, with recent knowledge on the types of debt Canadians living on low income may be dealing with, and things to know about the pitfalls of different types of debt. 

Click 'Get it' below to access the video link, and scroll down to access handouts, slides, and video timestamps for this webinar.



Read the presentation slides for this webinar.

Handouts for this webinar:
Report: Roadblock to recovery: Consumer debt of low- and moderate-income Canadian households in the time of COVID-19 (Prosper Canada)
Survey results: Canadians with incomes under $40K bearing the financial brunt of COVID-19 (Leger and Prosper Canada)

Time-stamps for the video recording:
4:42 – Agenda and introductions
7:52 – Audience polls
10:55 – Researching consumer debt (Speaker: Alex Bucik)
18:55 – How much does debt cost? (Speaker: Alex Bucik)
23:17 – How do different kinds of debt work? (Speaker: Alex Bucik)
29:17 – What are people using their credit for? (Speaker: Vivian Odu)
40:49 – What help is available to Canadian borrowers? (Speaker: Alex Bucik)
45:22 – Q&A

How to really build financial capability

Recent years have seen an explosion in interventions designed to improve financial outcomes of participants. Yet on-the-ground evidence suggests that not all financial education programs are equally successful at achieving this aim.

This paper examines the difference between interventions that work, and those than do not. It attempts to answer the question: “How do you actually build financial capability?” In doing so, we aim to help interested parties enhance the effectiveness of their programs and policies by providing them with evidence-based recommendations to drive positive outcomes in participants.



COVID-19 Financial Resource Centre

Credit Canada has pulled together financial information from trusted sources and released original content to help Canadians manage their finances during COVID-19.



The Early Effects of the COVID-19 Pandemic on Credit Applications

This report documents the early effects of the COVID-19 pandemic on credit applications, which are among the very first credit market measures to change in credit report data in response to changes in economic activity. Using the Bureau’s Consumer Credit Panel, how applications for auto loans, mortgages, credit cards, and other loans changed week-by-week during the month of March, compared to the same time in previous years was studied.



Roadblock to Recovery: Consumer debt of low- and moderate-income Canadians in the time of COVID-19

Almost half of low-income households and 62 per cent of moderate-income households carry debt, with households on low incomes spending 31 per cent of their income on debt repayments, according to a new report published by national charity, Prosper Canada.

This report analyzes the distribution, amount and composition of non-mortgage debt held by low- and moderate-income Canadian households and explores implications for federal and provincial/territorial policy makers as they develop and implement COVID-19 economic recovery plans and fulfill their respective regulatory roles.



Making Safety Affordable: Intimate Partner Violence is an Asset-Building Issue

This brief explores three existing unmet needs that contribute to survivors’ inability to build wealth: money, tailored asset-building support, and safe and responsive banking and credit services. Within each identified need, specific issues facing survivors, strategic actions in response to those issues, as well as innovative ideas and existing promising practices to help funders take action to prioritize survivor wealth are discussed.



Wealth and Health Equity: Investing in Structural Change

Building on the Asset Funders Network’s the Health and Wealth Connection: Investment Opportunities Across the Life Course brief, this paper details:

  • What we know about the health-wealth connection for adults.
  • Why investment in integration is important.
  • How philanthropy can contribute to improving health-wealth outcomes for adults.

On September 29th, AFN hosted a webinar to release the paper with featured speakers:

Dr. Annie Harper, Ph.D., Program for Recovery and Community Health, Yale School of Medicine
Joelle-Jude Fontaine, Sr. Program Officer, Human Services, The Kresge Foundation
Dedrick Asante-Muhammad, Chief of Race, Wealth, and Community, National Community Reinvestment Coalition



Lifting the Weight: Consumer Debt Solutions Framework

Aspen Financial Security Program’s the Expanding Prosperity Impact Collaborative (EPIC) has identified seven specific consumer debt problems that result in decreased financial insecurity and well-being. Four of the identified problems are general to consumer debt: households’ lack of savings or financial cushion, restricted access to existing high-quality credit for specific groups of consumers, exposure to harmful loan terms and features, and detrimental delinquency, default, and collections practices. The other three problems relate to structural features of three specific types of debt: student loans, medical debt, and government fines and fees.

This report presents a solutions framework to address all seven of these problems. The framework includes setting one or more tangible goals to achieve for each problem, and, for each goal, the solutions different sectors (financial services providers, governments, non-profits, employers, educational or medical institutions) can pursue.



Indicators for Financial Empowerment: Learnings from the National Financial Empowerment Champions Project

This resource offers a set of common indicators that community organizations can use to measure the reach and impact of their financial empowerment (FE) programming. It is intended for any community organization that works to foster greater financial well-being for economically disadvantaged Canadians.

This resource compiles the key performance indicators (KPIs) and presents them for use by community organizations beyond the National Financial Empowerment Champions (FECs) partners. The KPIs have been refined in response to partners’ feedback and in recognition of developments in the FE field, ensuring that the definitions reflect current and best practices in the field of financial empowerment/financial literacy in Canada and the USA.