Payday loan companies in Manitoba won't be allowed to raise their interest rates above 17 per cent, the province's Public Utilities Board (PUB) has ruled.
In its triennial report on the payday loan industry, filed Monday, the regulatory board turned down a request by payday lenders for a rate increase.
The companies will have to continue setting their rates within the 17 per cent maximum set by the provincial government in 2010.
In its report, the PUB also sounded the alarm over products that look like payday loans but are slightly different.
Some of those products are actually lines of credit and can charge rates of up to 75 per cent, says Byron Williams, a lawyer with the Public Interest Law Centre.
"For vulnerable consumers, charges of $49 or $75 for a $100 loan are far beyond their capability to support or to pay," he said.
Williams, who represented a coalition consisting of the Manitoba branch of the Consumers Association of Canada, Winnipeg Harvest and Community Financial Counselling Services, said the presence of payday loan-like products can be confusing to consumers.
"A consumer can look out and on a street corner see a regulated payday lender and a non-regulated payday lender or quasi-payday lender," he said.
"If a consumer's assuming they're going to have protection at both locations, that's just not the case."
The PUB is calling on the provincial government to "investigate the options for regulation of payday loan-like products."
The board also wants the province to conduct research to "consider options to reduce the risks to Manitoba consumers of unregulated internet payday lending."
Read the PUB report
Below is the Public Utilities Board's triennial review report on payday loans: