A prominent St. John’s investment advisor says there is nothing new about high-rate private loans among the city’s wealthy.
Larry Short, an investment advisor at HollisWealth in Newfoundland, said this practice is quite common in the capital. But he said the practice raises questions about what exactly is going on in the background.
“Whether the rates are 120%, 60 or 30 or whatever, whenever you see particularly high interest rates you always wonder what’s behind it,” a- he declared to St. John’s Morning Show.
“Why don’t you talk to a bank, how many people have you already talked to too?” “
Short did not specifically comment on the high-interest loan reported in 2013 between Ron Ellsworth, now deputy mayor of St. John’s, and Anne Squires, owner of collapsed real estate company Exit Realty on the Rock.
But he said it’s very rare to have a written document attesting to these arrangements – they’re usually handshake-type agreements.
When did a rate become predatory?
Ellsworth has yet to comment on the alleged deal. NTV and VOCM reported that Ellsworth loaned Anne Squires $ 50,000 in 2013, with fees and interest rates reportedly equivalent to 120% per annum.
Ellsworth has consistently declined to comment on the loan.
Short said there has been a long debate about exactly when an interest rate becomes predatory or unfair.
“These things have been debated for centuries, literally… when does it stop being reasonable? At what point, as a society, do we determine that someone is still being exploited?” He asked.
“Under the Criminal Code it says anything above that 60% annual rate – and I don’t know where that came from. “
Regardless of the rate, Short said police would not investigate until they received a complaint from one of the parties involved in the transaction.
He also said anyone with loan problems should contact the city’s credit counseling services, which he called a “godsend.”