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Payday loan legislation?

• PUBLICATION: The Edmonton Journal
• DATE: August 14, 2007

In the Canadian retail orbit, few enterprises have been as successful in recent years as payday loan outlets.

Their exponential growth and continuing popularity speaks to the fundaments of a free market: fulfilling a consumer need apparently unmet by traditional financial institutions. That stands in spite of loans at interests rates that would work to 500 per cent on an annual basis.

Via federal legislation enacted last year, oversight of payday loan companies is now a provincial responsibility. Since October, four provinces have created legislation to regulate the industry. The Alberta government has yet to do so, stating that it is starting from scratch and wants to get the legislation crafted properly. Policy-makers will have the luxury of seeing how other jurisdictions are faring. This is fair enough, as long as the wait isn't a stalling tactic.

Unpalatable though regulating the private sector may be in certain Stelmach government circles, it may be necessary in this case, given the payday loan industry's potential impact on thousands of Albertans.