Finance Minister Greg Selinger says Manitoba will do what it can to protect consumers.

Manitoba's NDP government is trying to determine how it can regulate payday loan companies following a serious setback in court.

The Manitoba Court of Appeal has ruled payday lenders were treated unfairly by the province's Public Utilities Board.

The payday loan companies, which offer short-term loans of about 14 days typically for the value of approximately 30 per cent of the borrower's take-home pay, took the province to court last year claiming lending rates set by the Public Utilities Board were unfair and would drive them out of business.

Last April, the PUB capped the maximum cost of credit at 17 per cent for loans up to $500 and six per cent for loans up to $1,500. Manitoba Court of Appeal Justice Alan MacInnes ruled those caps were unfair.

The Winnipeg police officer who led the criminal investigation into one payday loan company is disappointed.

Now retired, Len Terlinski says the case has dragged on for six years.

Terlinski said every jurisdiction in Canada had been waiting to see what happened with the Manitoba case.

"The whole thing truly is in limbo and it's been in limbo for a long time," he said. "I guess that's my biggest disappointment with this — it's now going to sit in limbo for another extended period of time."

Until it's resolved, there will be no rate regulations on payday loan companies beyond what the Criminal Code stipulates — a maximum annual interest rate of 60 per cent.

Payday loan companies typically charge a rate of interest that works out to slightly less than 60 per cent a year, but add fees that make the total cost of borrowing much higher — typically about $100 for a $300 loan.

Interest rates are generally regulated by the federal government, but consumer protection is a provincial responsibility.

That leaves payday loan companies largely unregulated as they fall somewhere between federal and provincial jurisdictions. The delay in resolving that issue is a disappointment for Manitoba Finance Minister Greg Selinger.

"The PUB decision cannot be implemented on the interest rate caps that they were proposing," Selinger said. "And so consumers won't be protected on the amount of interest that can be charged."

Selinger says the province will try to protect consumers in other ways.

"There are things we can do to protect people … for example, having a cooling off period after they take a loan. Giving them 48 hours to consider whether they want to proceed with that loan," he said.