Canadian Payday Loan Association Welcomes New Regulation in Nova Scotia
July 21, 2009 - HALIFAX – The Canadian Payday Loan Association today welcomed news that the Province of Nova Scotia will be the first in the Canada to officially regulate the payday loan industry including a maximum rate of borrowing as of August 1, 2009. This comes after five years of close work with the provinces and the federal government to introduce laws that balance the need for the industry and its products with strong consumer protection.
“Nova Scotia has showed great leadership in protecting consumers while still recognizing the important service the payday loan industry provides for many people seeking short-term, small-sum loans,” said the Hon. Stan Keyes – President of the CPLA. “Our members look forward to operating fully within the new laws and regulations and continuing to work with government to ensure the regulations achieve the desired outcomes.”
The new rules will set the maximum cost of borrowing at $31 per $100.
Nova Scotia’s Utilities and Review Board (UARB) concluded public hearings last year on this topic and made the following findings:
- Consumer satisfaction with payday loans: People who take out payday loans are satisfied with the costs they currently pay (paragraph 53)
- Incorrect reports of excessive fees: Reports of excessive fees in the industry do not accurately reflect the real costs of a short-term loan – fees for short-term payday loans should not be compared to fees for annual loans (paragraphs 54 and 55)
- Competition will protect consumers: Competition in a free marketplace is – and will be – the most effective control on how much payday loan companies charge and will ensure consumer protection (paragraph 105, 112, 128 and 220)
The CPLA represents 22 responsible payday loan companies across Canada and has been actively calling on governments across the country for five years to introduce and pass effective payday loan legislation and regulation. The CPLA’s extensive research and submission to the Nova Scotia UARB can be found at http://www.cpla-acps.ca/english/mediasubmissions.php.
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