Service NL
December 1, 2016
Protecting Consumers
Provincial Government Introduces Legislation to Regulate Payday Loans
Amendments to the Consumer Protection and Business Practices Act to regulate payday loans will receive second reading in the House of Assembly today.
"Payday loans are one of the few financial options available to individuals who have difficulty
accessing credit through traditional lending institutions. This legislation delivers on our
government's commitment to strengthen consumer protection, by requiring payday lenders to be
licensed and by imposing restrictions and obligations that will protect consumers."
- The Honourable Eddie Joyce, Minister of Service NL
Payday loans are short-term loans for small amounts of money provided by a non-traditional lender. They are defined in the bill as $1,500 or less loaned for a maximum of 62 days.
This legislation will enable the Provincial Government to provide the following protections for users of payday loans:
- Limiting the total cost of borrowing for payday loans;
- Requiring payday loan agreements to include specified terms, information and disclosure statements;
- Cancellation rights during a cooling-off period;
- Prohibiting certain payday lender practices; and
- Providing borrowers with remedies when payday lenders do not honour their responsibilities under this legislation.
Regulations will be developed in consultation with key stakeholders over the next year. All regulations are expected to be in place by the end of 2017.
The Federal Government changed the Criminal Code of Canada in 2007 to enable provinces to regulate payday lending and eight other provinces have passed legislation to do so.
QUICK FACTS
- Amendments to the Consumer Protection and Business Practices Act to regulate payday loans will receive second reading in the House of Assembly today.
- Eight other provinces have already passed legislation to regulate payday loans.
- The new regulations will set maximum lending rates and require more stringent disclosure practices to ensure consumers understand the terms of their loan.
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Media contact:
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Gina MacArthur Media Relations Manager Service NL 709-729-4748, 730-2977 ginamacarthur@gov.nl.ca |
2016 12 01 3:00 p.m.