B.C. aims to strengthen consumer protections with payday loan law
Proposed amendments to existing law would set borrowing limits and prohibit some fees and charges
British Columbia is amending its consumer protection law to offer more safeguards for people forced to turn to high-cost loan services and risk being caught in an endless cycle of debt payments.
Solicitor General Mike Farnworth says proposed amendments to B.C.'s Business Practices and Consumer Protection Act will set limits on borrowing costs, prohibit certain fees and charges and restrict the use of borrowers' personal information.
The minority New Democrat government highlighted stronger consumer protection measures in its throne speech earlier this month, saying it plans to crack down on unfair payday loan practices.
Last June, the government capped fees for cashing assistance cheques at $2 plus one per cent of the value of the cheque up to a maximum of $10 and lowered the maximum fees for payday loans to $15 for every $100 borrowed.
Farnworth says the amendments seek to improve affordability for people using payday loans and other high-credit products and establishes a new licensing and regulatory system for high-cost loan providers
He says the legislation will also establish a new consumer education fund to help people better understand and prevent financial problems.
"There are consumers who have limited options and seek high-cost loans and other high-cost credit products from alternative lenders often with terms and conditions that aren't fair," said Farnworth.
"This bill proposes measures to strengthen existing payday lending laws."