Board set to look at payday loan industry
- PUBLICATION: AllNovaScotia.com
- DATE: October 11, 2007
The fate of payday loan lenders in Nova Scotia will be decided over the next few months, culminating in a hearing in late January.
The Nova Scotia Utility and Review Board announced the timetable for the payday lender hearings. The hearings will determine how much interest businesses like Money Mart and Cash Money can charge on payday loans.
The hearing will review aspects of the Consumer Protection Act, including interest rates, charges for extending loans, revenue requirements and operating expenses, credit options and other regulations.
The new regulatory regime will attempt to balance the needs of the payday industry - who need to run a financially viable business - while at the same time protecting users of the service.
It's hard to predict what the board will do but the Canadian Payday Lender Association expects the board to disallow the practice of rollover - granting a customer an extension of an outstanding loan for a fee or advancing a new loan to pay off the existing one.
In April, the federal government passed Bill C-26, which exempted payday lenders from section 347 of the Criminal Code, which establishes a criminal rate of interest at 60%.
Now it's up to the provinces to regulate the payday loan industry through the public utilities.
The final date for filing interventions and comments is October 26. The intervenors list will be issued by the board in early November.
The hearing - to take place in Halifax - will be before Roland Devereau, John Morash and Wayne Cochrane.