Leo Sorensen

Posted by on Dec 3, 2007 in Proponent, Quotes

“The government of Manitoba has taken a very socialist attitude of where they want to go… Why are they regulating us? Are they telling Wal-Mart what to charge? Are they telling anybody else what to charge? It’s a free market.”

Payday lender Leo Sorensen believes that the government has no place telling a business what it can charge its customers. Sorenson, who in the past has compared the payday loan business to prostitution, claims he has every right to charge borrowers interest rates of more than 700% APR and even suggested that some of his customers may resort to stealing to pay bills if payday loans were not available…

Sorensen said that regulating payday loans is a “socialist approach” and the government of Manitoba is inadvertently sending the wrong message to businesses:

“Why do you want the Manitoba government to take the freedom away from industry or business? What message are you sending to the rest of the businesses? …I don’t think the government realizes the message they’re sending to the business industry.”

He freely admits that his stores often charge 720% APR (Annual Percentage Rate) but claims that his company can barely cover costs and that his company made only $20,000 in profit in Manitoba last year. If the government imposes too many restrictions, Sorensen said he would close his outlets in that province:

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

Sorensen, who portrays his industry as helpers of the poor, said that eliminating his industry would harm his consumers:

“If we’re not there, what’s going to happen? The power is going to be cut off. The kids are not going to eat.”

According to CBC News, Sorensen said that regulating payday lenders out of business would be hard on his customers and he even suggested some of them might resort to stealing to pay bills if the payday loan option were not available.

Sorensen added that 10 Manitobans would lose their jobs if he closed his Winnipeg outlets and that he was concerned about his staff:

“I’m basically here to maintain the employment of my people.”

Sorensen believes that his industry is not abusive but merely takes advantage of a situation:

“We’re not abusing anyone… Yes, we take advantage of a situation because a lot of people do not manage their money, which puts them in a financial situation.”

Leo Sorensen, a veteran of the construction industry, entered the payday loan industry nine years ago. He is chief executive officer of Sorensen’s Loans ’Til Payday. His company has 30 outlets across Canada and is based in Port Alberni, British Columbia.

Sources:
Payday Loan Official Defends Rates by Joe Paraskevas (Winnipeg Free Press)
Payday Loan Company Defends 700% Interest by Joe Paraskevas (CanWest News Service / Ottawa Citizen)
Regulation of Payday Loans ‘Socialist’: Company Owner (CBC News)
Interest Rates of More than 700% Only Fair, Payday Loan Hearings Told (Canadian Press)
Interest Rates of Over 700% Defended (Canadian Press)

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Even though Mr. Sorensen claims he can “barely covers costs” in spite of charging 720% APR, that says more about his industry and/or business practices than it does about the rate itself. While 720% APR may seem fair to him, it is not a reasonable rate for a consumer to pay, especially if that consumer is living paycheck to paycheck. Consumers should always consider cheaper payday loan alternatives.

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