Legislation to regulate the payday lending industry is one step closer to coming into force, following an exemption that was published today by the Federal Government in the Canada Gazette.
The exemption in the Canada Gazette can be viewed at: www.gazette.gc.ca/rp-pr/p2/2018/2018-12-12/pdf/g2-15225.pdf
In December 2016, the Provincial Government passed legislation to protect consumers who use payday lending services and also increase consumers’ awareness of their rights when entering into a payday loan agreement.
The province could not proclaim the legislation into law until the Federal Government allowed for the exemption of Section 347 of the Criminal Code of Canada – the criminal interest rate provision – as it relates to payday loan agreements.
In August 2017, the Provincial Government made a formal request for exemption. With the granting of the exemption, government will move forward with gazetting the associated regulations and proclaim the legislation early in the new year.
The legislation enables 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.
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“Enhanced consumer protection has been a strong focus for our government, and adding protection for those who use payday lenders is a significant step. The exemption to the Criminal Code of Canada allows us to proceed with the proclamation of this important piece of legislation. It also helps ensure consumers understand the agreements they enter into with payday loan companies.”
Honourable Sherry Gambin-Walsh
Minister of Service NL
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Provincial Government Introduces Legislation to Regulate Payday Loans
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Krista Dalton
Service NL
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