Canadian Gov’t to Introduce Payday Loan Bill; Would Allow Provinces to Individually Regulate
By Paul RizzoPayday Loan Writer
The Conservative Canadian government is preparing to introduce legislation that would finally rein in the nation's ballooning payday lending industry.
If the government's efforts are successful, it will be delegating power to Canada's individual provinces to regulate payday advance loans and protect consumers from the financial pitfalls.
Justice Minister Vic Toews and Industry Minister Maxime Bernier are working hard, senior sources report, to introduce amendments to the Criminal Code. If at all possible, the proposed reforms will be in place by the end of the spring session of Parliament.
The bill would address concerns of citizens and consumer advocates that some firms in Canada offering short term payday loans are charging exorbitant rates of interest to consumers. Sometimes the loans entail interest of hundreds of percent each year.
The Calgary Sun reports that the payday loan industry itself has been lobbying to be regulated in order to eliminate the so-called bad apples, while allowing reasonable short-term rates. Right now, the Criminal Code sets a 60 percent annual interest rate cap on the financial sector, a bar that doesn't include instant payday loans.
To date, only one lender has been charged with violating that limit, but throughout the enormous nation, calls for payday loan reform have gained traction in recent weeks. The controversy will undoubtedly continue until this issue is resolved. We will follow this planned legislation with a great level of interest.
