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There are times when bounced checks or the penalties for arrears exceed the cost of a payday loan. To end payday lending -- even if it is predatory -- might leave people worse off. What is needed is a better loan, and to get that, we need a better market that re-balances the interests of the lenders and the borrower.
A list of the terms our society uses to describe payday lenders almost tells you everything you need to know. It reads a bit like a description of a B-grade horror film: predators, thieves, vampires, slave-drivers, or (my favourite) rapacious usurers. But if they're so awful, why are they everywhere? Why is it that, despite a seemingly universal hatred for them, they have popped up like mushrooms in cities across Canada?
There's been much hype and commotion since the federal government rolled out its revamped Universal Child Care Benefit (UCCB) last month. Dubbed 'Christmas in July', the change distributed nearly $3 billion to Canadian families, regardless of income, with children aged 17 and under.
Do you recognize any of these red flags? On a board or in a company of which you serve? Allegations of wrongdoing can put assets and reputation at risk. Regulators have enormous power, and are focusing their sights much more on the role a board plays, or does not play, in overseeing the affairs of the company.
It's a wonder that the heads of state and heads of government of the G20 who just met in Russia spent any time at all talking economics. Seriously, how could they pull themselves away from discussing Syria (or Sochi, or Snowden) long enough to actually focus on the international financial system? Sure, that's the explicit purpose of the G20 meetings, but still, let's give credit where credit is due.
It is hardly surprising that boards do not focus on value creation, strategic planning, or maximizing company performance, survey after survey, as much as they do on compliance. Their compensation structure does not incent them to. Here is what is needed to align director pay with shareholder interests:
There is a strong bias for audit committees to oversee many risks, not just financial. No regulation mandates this however. Audit committees should not oversee risks that they are not qualified to oversee. Here are a dozen broader questions to determine whether your Audit Committee needs a reset.
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