Manitoba Public Utilities Board
“The Board anticipates that the maximum charges established by this Order will result in some, if not many, payday lenders exiting Manitoba, and acknowledges that such a result will bring transitory hardship to some payday loan borrowers who will either have to establish an alterative source of credit or do without.”
According to Maximum Charges for Payday Loans, a report released by the Manitoba Public Utilities Board, the Board expects that their recently imposed rate cap of $17 per $100 borrowed (to a maximum of $500) will drive many payday lenders out of business and cause hardship to borrowers…
The entire 326-page report is available online at the following link:
Maximum Charges for Payday Loans (External Link – Warning: PDF)
(http://www.pub.gov.mb.ca/pdf/misc/39-08.pdf)
Note: To open PDF files quickly without freezing your browser, please use Foxit Reader (External Link). It is much faster than Adobe’s Acrobat Reader, one-tenth the size, it won’t mess with your system settings and it will not try to connect to the Internet behind your back (it contains no spyware).
The report includes the opinions of rate cap opponents such as Leo Sorensen, owner of Sorensen’s Loans til Payday:
“…if we’re not allowed to make money, we’re gone; it’s that simple. The services won’t be here.”
Note: The rate cap of $17 per $100 borrowed is still very high. According to the Payday Loan Calculator (External Link), it works out to an Annual Percentage Rate (APR) of 443% on a 14-day loan.
Sorensen believes that few payday firms (perhaps only Money Mart) will be able to operate at a rate lower than they are currently charging.
Source:
Maximum Charges for Payday Loans (Manitoba Public Utilities Board)
Related Quotes:
Leo Sorensen
Doctor Lawrence I. Gould
Judy Wasylycia-Leis
Related Article:
Five Payday Loan Laws that Hurt Consumers
Editor’s Note: We believe that legislating legal loan service providers out of business will leave fewer options for consumers (driving some to illegal loan sharks) and less competition in the industry (leading to poor service and higher prices). If the government really wants to help consumers, it should offer incentives for credit unions to offer cheaper payday alternative loans. More competition and lower prices are the best way to help consumers.
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