New payday loan interest rules on horizon
- SOURCE: Winnipeg Sun
- DATE: July 21, 2010
Manitoba’s new payday loan rules will come into effect Oct. 18.
The provincial government announced the new measures — which cap payday loan interest at $17 per $100 borrowed, with a maximum loan amount of 30% of a person’s paycheque — in April, but only announced on Tuesday the date that they will come into force.
Manitoba’s $17 rate will be the lowest among the provinces that have regulations in place. Maximum rates elsewhere range from $21 to $31.
The $17 limit will include all fees.
The Canadian Payday Loan Association, which represents payday lenders, has slammed Manitoba’s new rules, citing a study that showed the average payday loan in Manitoba costs the company more than $26 per $100 to provide.
The association warned in April the new rules may mean some payday loan outlets will close, leaving people with fewer places to turn for credit.