Canadian Payday Loan Chief: Bring on the Regulations!
By J.J. CameronPayday Loan Writer
This is interesting. While any sort of crackdown on payday loans in Canada may not be high on the government's list, a major advocate from that industry is actually welcoming possible changes.
Michael Thompson is telling the provincial government to basically bring on the red tape.
The president of the Canadian Payday Loan Association said the industry would be better off if government brought in new rules that all in the industry would have to follow. Roughly two-thirds of all Canadian quick payday loan companies are part of this association.
They abide by what he calls "really strict" voluntary regulations.The others don't. Therein lies the problem.
"We believe, just from a fundamental business perspective, a protected consumer is a happy customer. So we think it's the right thing to do," he said.
New regulations would also make it easier for businesses to operate in different provinces, always a goal of any fast cash loan chain.
Thompson said the most important restriction is a ban on "rollovers," where companies aren't allowed to push back due dates for a fee. As the date gets pushed back, the debt increases.
Other regulations would include setting a maximum loan of $1,500 and not having a term longer than 31 days.
"There's been some controversy around the industry, which hasn't been very positive for the industry in a way. We think that having regulation in place will clarify a lot of the issues … so everybody knows exactly how it operates and how it conducts its business.
Association numbers suggest between 1.5 million to two million Canadians use payday loans online. The average loan is $280.
"The province of Nova Scotia has said it wants to regulate and we totally support that. We came down here today to start working with them to provide them an industry perspective on the right way to go," Thompson stated.
Service Nova Scotia and Municipal Relations spokeswoman Lenore Bromley said the deputy minister met with Thompson. It was called a "useful discussion forum that allowed us to listen to, and exchange views on, current legislative proposals," she said.
It's all worth keeping an eye on. Rarely does a government claim that an issue isn't pressing, only to have those within the payday advance world call for regulations. On itself.
