Justice Minister Vic Toews
“As more Canadians make use of payday lending, Canada’s New Government is taking steps to ensure that the industry can be properly regulated.”
Canada Justice Minister Vic Toews wants to amend the Criminal Code to give provinces the power to regulate the payday loan industry…
According to a Canada Department of Justice press release, the current legislation (section 347 of the Criminal Code, which caps loan interest rates at 60% APR) was intended to combat loan sharking and organized crime. It was not intended to be a consumer protection tool.
Under the proposed amendments, payday lenders will be exempt from section 347 of the Criminal Code. Provinces will be given the power to set limits on rates and regulate the business practices of payday loan shops within their jurisdiction.
Justice Minister Vic Toews said:
“We’re 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.”
The questionable business practices mentioned in the press release were:
- high cost of borrowing
- insufficient disclosure of contractual terms
- unfair collection practices
- spiralling debt loads resulting from rolling over loans
Vic Toews is Minister of Justice and Attorney General of Canada.
Source: Minister of Justice Announces Proposed Amendments to the Criminal Code to Allow Regulation of the Payday Lending Industry (Canada Department of Justice)
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