Liberal Encourages Province to Take Up Payday Loan Legislation
By Paul RizzoPayday Loan Writer
According to The Guardian, protection against high interest rates charged by payday loan companies remains a distant prospect for Islanders.
Liberal MLA Richard Brown is calling on the Binns government to take up an offer by the federal government, however, and quickly write legislation to control this growing financial sector.
“These companies provide short-term loans to individuals who live paycheck to paycheck who may not be eligible for traditional credit,” said Brown. “To date, there is virtually no effective regulatory protection for consumers using these financial services.”
On Oct. 6, the federal government tabled bill C-26 to amend the Criminal Code so it targets regular and/or no faxing payday loan companies. The bill gives provinces the option of controlling these companies instead of the federal government.
It may be a long time before the changes introduced by the Harper government last week are passed by Parliament and still more time before they come into effect in regard to cash loans, said Connie McNeill, spokesperson for the P.E.I. Attorney General.
“The provinces aren’t all on board one way or the other,” said McNeill. “Ontario is leaning toward (preferring) Ottawa maintain authority and set guidelines across the country. I think Manitoba, Nova Scotia and some others are much more anxious to get the authority themselves.”
The Prince Edward Island government has yet to decide which form of faxless payday advance control would best suit consumers; so P.E.I. continues close consultation and discussion with the other provinces and territories, said McNeill.
The only controls on lending are in the Criminal Code which sets anything over 60 percent per year as a criminal interest rate.
On P.E.I., any complaints about cash advance companies are sent to the consumer services division.
Brown has a suggestion.
“The approach that other provinces are taking is to have their public utility boards set the fees these lenders can charge,” he said. “I propose that we turn that function over to the Island Regulatory and Appeals Commission.”
