Ontario passes payday loans legislation
New law requires licensing of all payday lending industry operators and bans controversial lending practices
Tuesday, June 10, 2008
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Ontario lawmakers have passed a new law regulating the payday loan industry.
The Ontario government says that the new Payday Loans Act, 2008 will enhance consumer protection by licensing all payday lending industry operators and banning controversial lending practices. Lenders are required to include all charges consumers are required to pay in the total cost of borrowing; borrowers can cancel payday loan agreements during a cooling-off period; and, operators are to contribute to a public education fund on payday lending.
“This legislation will help shut the door on payday loan businesses that take advantage of poor families’ vulnerability,” says Deb Matthews, Minister of Child and Youth Services.
The act, which was unanimously passed by the legislature, also includes an enforcement regime of inspections, prosecutions and licence suspensions, as well as an education campaign to help consumers make informed decisions.
Additionally, an independent advisory board of experts, business representatives and consumer advocates will examine the costs for payday loans and recommend a limit on the total cost of borrowing.
The Canadian Payday Loan Association (CPLA) welcomed the passage of the Ontario legislation.
It says Ontario becomes the sixth province to have put in place legislative measures to regulate the payday loan industry.
Read other news from our From the Regulators Section
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