Provincial Payday Advance Regulation Pushed in Canada
By Paul RizzoPayday Loan Writer
Local MP Colin Carrie is working with his government to push provincial regulation of the no fax payday loans industry.
Dr. Carrie, MP for Oshawa and parliamentary secretary to the minister of industry, appeared at the Senate Committee on Banking, Trade and Commerce this week to explain bill C-26, which received third reading earlier this month.
The bill amends the Criminal Code to exempt payday cash loans from criminal sanctions, allowing for provincial regulation of the industry.
“As more Canadians make use of payday lending, Canada’s new government is taking steps to ensure that the industry be properly regulated,” Dr. Carrie said. “We are getting things done for families and taxpayers by giving provinces and territories the tools they need to protect consumers and deal with questionable business practices.”
A cash advance payday loan is a short-term loan for a relatively small sum of money. Loans are often provided in cash, although a number of lenders provide money on a debit card. In order to qualify for a payday loan, the borrower must have a steady source of income, usually from employment but also from pensions or other sources and a bank account.
Payday lending is a rapidly growing industry in Canada. While it was non-existent before 1994, the industry has grown to more than 1,350 outlets nationwide, accounting for an estimated $1.7 billion in lending each year.
Currently, there are no federal or provincial regulations to set limits on interest rates charged by these no fax payday advance lenders, prompting concern from consumer advocacy groups and politicians.
