The payday lending industry will soon be regulated in this province.
It’s a process two years in the making.
In December 2016, the province passed legislation to protect consumers who use payday lending services, and also increase awareness of their payday loan agreement rights.
However, the province couldn’t proclaim it law until the federal government allowed an exemption of a section of the Criminal Code. The specific section deals with the criminal interest rate provision as it relates to payday loan agreements.
That exemption was published in the Canada Gazette on Wednesday.
With the granting of the exemption, the government will now publish the associated regulations and proclaim the legislation into law early in the new year.
“Enhanced consumer protection has been a strong focus for our government, and adding protection for those who use payday lenders is a significant step,” Service NL Minister Sherry Gambin-Walsh stated in a news release.
The new law will allow the provincial government to provide the following protections for users of payday loans:
- Limiting the total cost of borrowing for payday loans;
- Requiring payday loan agreements to include specified terms, information and disclosure statements;
- Cancellation rights during a cooling-off period;
- Prohibiting certain payday lender practices; and
- Providing borrowers with remedies when payday lenders do not honour their responsibilities under this legislation.