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Title
Consultation on Cracking Down on Predatory Lending by Further Lowering the Criminal Rate of Interest and Increasing Access to Low-Cost Credit - Canada.ca
For background, the model for the past decade has been a 59% annual rate limit on loans with an exception made for payday loans that delegates all regulation to the provincial governments for any...
For background, the model for the past decade has been a 59% annual rate limit on loans with an exception made for payday loans that delegates all regulation to the provincial governments for any loans with a term of up to 62 days and an amount of up to $1500.
What that has generally meant is a limit of between $15-17 per $100 borrowed, and some random hodgepodge of other limitations involving frequency of borrowing, signage, disclosures, cancellation periods, etc.
The fed has proposed a new hard maximum of $14 per $100 borrowed and a limit of 35% per year for other high risk loans (eg. auto title loans).
Now before even implementing that plan they are investigating new limits going even lower. It remains to be seen what that means for consumer access to credit, and whether this will be a net consumer benefit or just a transition to more unlicensed loan sharking at higher rates with less oversight.
For background, the model for the past decade has been a 59% annual rate limit on loans with an exception made for payday loans that delegates all regulation to the provincial governments for any loans with a term of up to 62 days and an amount of up to $1500.
What that has generally meant is a limit of between $15-17 per $100 borrowed, and some random hodgepodge of other limitations involving frequency of borrowing, signage, disclosures, cancellation periods, etc.
The fed has proposed a new hard maximum of $14 per $100 borrowed and a limit of 35% per year for other high risk loans (eg. auto title loans).
Now before even implementing that plan they are investigating new limits going even lower. It remains to be seen what that means for consumer access to credit, and whether this will be a net consumer benefit or just a transition to more unlicensed loan sharking at higher rates with less oversight.