Bill Proposes Province Power to Regulate Payday Loans in Canada
By J.J. CameronPayday Loan Writer
Because payday loan companies up north have actually encouraged regulations on their industry, Canadian cash loan providers will be happy about the following news:
The federal government has introduced changes to the Criminal Code that will allow provinces to regulate the industry.
Justice Minister Vic Toews says the legislation, once it becomes law, will give provincial governments the tools they need to protect consumers from what he calls "questionable business practices."
As it stands, it's illegal under federal law to charge annual interest of more than 60 percent. Yet the rates charged by some fast cash advance companies can amount to 1,000 percent once service charges are included.
The proposed Conservative legislation will allow provinces with consumer protections for payday loan customers to permit interest charges above the 60 per cent threshold.
In response, cash advance loan companies have complained that limiting very small, short-term loans to 60 percent interest would not even allow them to cover basic administration costs.
The proposed legislation appears likely to get all-party consent and be fast-tracked through the Commons. Once it does, the danger of payday loan sharking appears to be over in Canada.
