• The product should disclose very transparently the amount the borrower needs to pay biweekly/monthly and the interest rate being charged and the total money the borrower will be paying by the end of the loan term. [...] The biggest barrier to the needed change here is the historic lack of will of the government to create effective solutions; and the desire of the government to rely on financial for-profit entities to solve this problem. [...] Should further revisions to the Criminal Code’s provincial or territorial-requested payday lending exemption be considered? The APR is a critical way to measure and compare the cost of a loan, because it takes both interest and fees, and the length of the repayment period, into account. [...] The 2007 decision to exempt payday lenders from adhering to the Criminal Code’s maximum interest rate, and the transfer of regulatory responsibility for payday and other high-cost lending to the provinces, resulted in patchwork of inadequate regulation and enforcement across the country and enabled payday loan interest rates to soar, topping 600% in some jurisdictions. [...] The repeal of section 347.1 and the consequent re-inclusion of payday loans under section 347 of the Criminal Code should be pursued over a transition period in which the federal government prepares a federally-backed low-income credit product, and supports the creation of safe/affordable alternatives.
- Pages
- 5
- Published in
- Canada
