Advertisement

Payday Lending Regulations

  • Katrine Dilay
  • Byron Williams
Chapter

Abstract

Since the late 2000s, Canadian provinces have regulated the payday loan industry. Most provincial governments initiated a regulatory response in an attempt to protect consumers while allowing the payday lending market to continue operating, but Québec effectively disallowed payday lending through a usury law. This chapter examines the roots of small loan regulation in Canada, considers its contemporary application to payday lending in Canada, and compares this with the situation in the United States. There are similarities in payday loan regulation in Canada but also variation so that it appears regulators have not agreed on a unified regulatory model.

Works Cited

  1. Australian Securities and Investments Commission (ASIC). 2015a, March. 15-056MR ASIC Puts Payday Lending Industry on Notice to Lift Standards. Australia. Accessed on July 25, 2017. http://www.asic.gov.au/about-asic/media-centre/find-a-media-release/2015-releases/15-056mr-asic-puts-payday-lending-industry-on-notice-to-lift-standards/
  2. ———. 2015b. Australia. Accessed on July 25, 2017. https://www.moneysmart.gov.au/borrowing-and-credit/consumer-credit-regulation
  3. Baldwin, R., M. Cave, and M. Lodge. 2011. Understanding Regulation: Theory, Strategy, and Practice. 2nd ed. New York: Oxford University Press.Google Scholar
  4. BC Gov News. 2016, September 21. Cost of Payday Loans to Drop Amid Look at All High-Cost Financial Services. (P. S. General, Producer). Accessed on July 24, 2017. https://news.gov.bc.ca/releases/2016PSSG0193-001751?WT.cg_n=Hootsuite
  5. Bellam, J., and A. Talai. 2012. Short-Term Emergency Lending: Examining Usury Law in the United States and Canada. Western. Journal of Legal Studies 2 (1).Google Scholar
  6. Buckland, J., E. Sinclair, and K. Martin. 2016. Small Loan Workshop: Summary of Proceedings and Recommendations. Accessed on July 27, 2017. http://www.pubmanitoba.ca/v1/payday_loan_review2016/cac_12_tab_9_small_loans_workshop_j_buckland_e_sinclair_k_martin.pdf
  7. City of Hamilton. 2016. By-Law No. 07-170, a By-Law to License and Regulate Various Businesses. Accessed on July 27, 2017. https://d3fpllf1m7bbt3.cloudfront.net/sites/default/files/media/browser/2016-02-25/16-053.pdf
  8. Consumer Financial Protection Bureau (CFPB). 2015. Financial Well-Being: The Goal of Financial Education. January. Accessed on July 25, 2017. http://files.consumerfinance.gov/f/201501_cfpb_report_financial-well-being.pdf
  9. Consumers Council of Canada. 2015. Consumer Experiences in Online Payday Loans. Denise Barrett Consulting. Accessed on July 25, 2017. http://www.consumerscouncil.com/site/consumers_council_of_canada/assets/pdf/ccc_online_payday_loans_web.pdf
  10. Ellis, D. 1998. The Effect of Consumer Rate Deregulation on Credit Card Volumes, Charge-Offs, and the Personal Bankruptcy Rate. Federal Deposit Insurance Corporation. Accessed on July 24, 2017. https://www.fdic.gov/bank/analytical/bank/bt_9805.html
  11. Financial Conduct Authority. 2014. FCA Confirms Price Cap Rules for Payday Lenders. Australia. Accessed on July 25, 2017. https://www.fca.org.uk/search-results?search_term=Borrowers%20must%20never%20have%20to%20pay%20back%20more%20in%20fees%20and%20interest%20than%20the%20amount%20borrowed
  12. Financial Conduct Authority (FCA). 2015. PS14/16: Detailed Rules for the Price Cap on High-Cost Short-Term Credit – Including Feedback on CP14/10 and Final Rules. Australia. Accessed on July 25, 2017. https://www.fca.org.uk/publications/policy-statements/ps14-16-detailed-rules-price-cap-high-cost-short-term-credit
  13. Financial Consumer Agency of Canada (FCAC). 2015. National Strategy for Financial Literacy: Count Me In, Canada. Government of Canada. Accessed on July 25, 2017. https://www.canada.ca/content/dam/canada/financial-consumer-agency/migration/eng/financialliteracy/financialliteracycanada/strategy/documents/nationalstrategyforfinancialliteracycountmeincanada.pdf
  14. Government of Alberta. 2000. Fair Trading Act. RSA 2000, c F-2, at s 124.61(1). Legislative Assembly of Alberta. Accessed on July 24, 2017. http://www.qp.alberta.ca/documents/Acts/F02.pdf
  15. ———. 2016. Payday Loan Regulation Review. Service Alberta. Accessed on July 27, 2017. http://www.servicealberta.ca/3154.cfm
  16. Government of Australia. 2009. National Consumer Credit Protection Act, No 134. (2009). In National Consumer Credit Code (pp. Schedule 1, ss 72–81). Australia: Commonwealth Consolidated Acts. Accessed on July 25, 2017. http://www.austlii.edu.au/au/legis/cth/consol_act/nccpa2009377/sch1.html
  17. Government of British Columbia. 2004. Business Practices and Consumer Protection Act, [SBC 2004] Chapter 2, at s 112.02. Victoria. Accessed on July 24, 2017. http://www.bclaws.ca/civix/document/id/complete/statreg/04002_00
  18. ———. 2009. Payday Loans Regulation, BC Reg 57/2009, at s. 17(1). Accessed on July 24, 2017. http://www.bclaws.ca/Recon/document/ID/freeside/16_57_2009
  19. Government of Canada. 1939. Small Loans Act of 1939, George VI c 23 SC 1939 c 23.Google Scholar
  20. ———. 1980a. 32nd Parliament 1st Session Vol 1, 752. May 6.Google Scholar
  21. ———. 1980b. 32nd Parliament 1st Session Vol 4, 4642. Nov. 13.Google Scholar
  22. ———. 1980c. SENATE 32nd Parliament 1st Session Vol 1, 816. Oct. 7.Google Scholar
  23. ———. 1985. Criminal Code R.C.C., c. C-46. Accessed on July 24, 2017. http://laws-lois.justice.gc.ca/eng/acts/C-46/
  24. Government of Manitoba. 1987. Consumer Protection Act, CCSM c C200, RSM 1987. (Payday Loans Act). Legislative Assembly of Manitoba. Accessed on July 25, 2017. http://web2.gov.mb.ca/laws/statutes/ccsm/c200e.php
  25. ———. 2007. Payday Loans Regulation, 99/2007. Accessed on July 24, 2017. https://web2.gov.mb.ca/laws/regs/current/_pdf-regs.php?reg=99/2007
  26. ———. 2013. The Consumer Protection Amendment Act (High-Cost Credit Products) Bill 34, 3rd Session, 40th Legislature. The Legislative Assembly of Manitoba. Accessed on July 27, 2017. https://web2.gov.mb.ca/bills/40-3/b034e.php
  27. ———. 2014–2015 and 2015–2016. Manitoba Tourism, Culture, Heritage, Sport and Consumer Protection Annual Reports 2014–2015 and 2015–2016. Accessed on July 25, 2017. https://www.gov.mb.ca/chc/reports/pdf/annual_report_2014-15_tchscp.pdf; http://www.gov.mb.ca/chc/reports/pdf/annual_report_2015-16_tchscp.pdf
  28. ———. 2016. High-Cost Credit Products Regulation, Pursuant to the Consumer Protection Act CCSM c. C200. Accessed on July 27, 2017. https://web2.gov.mb.ca/laws/regs/current/_pdf-regs.php?reg=7/2016
  29. Government of New Brunswick. 2008. An Act Respecting Payday Loans, SNB 2008 c3. Legislative Assembly of New Brunswick.Google Scholar
  30. Government of Newfoundland and Labrador – Canada. 2010. Provincial Government Will Not Regulate Payday Loan Companies. Government Services. Accessed on June 16, 2010. http://www.releases.gov.nl.ca/releases/2010/gs/0616n11.htm
  31. Government of Newfoundland and Labrador. 2016. An Act to Amend The Consumer Protection and Business Practices Act. http://www.assembly.nl.ca/business/bills/bill1652.htm
  32. Government of Newfoundland and Labrador House of Assembly. 2016. Progress of Bills. http://www.assembly.nl.ca/business/bills/ga48session1.htm
  33. Government of Nova Scotia. 2015. Payday Lenders Regulations, NS Reg 84/2015, s 5. Accessed on July 25, 2017. https://novascotia.ca/just/regulations/regs/cppayday.htm
  34. Government of Ontario. 2008a. Payday Loans Act, 2008, S.O. 2008, c. 9. Accessed on July 24, 2017. https://www.ontario.ca/laws/statute/08p09
  35. ———. 2008b. O. Reg. 98/09: General, at s. 23, (under Payday Loans Act, 2008, S.O. 2008, c. 9). Accessed on July 24, 2017. https://www.ontario.ca/laws/regulation/090098
  36. ———. 2016. Ontario Seeking Input on Lower Rates for Payday Loans. Ontario Newsroom. Accessed on July 27, 2017. https://news.ontario.ca/mgs/en/2016/04/ontario-seeking-input-on-lower-rates-for-payday-loans.html
  37. Government of Prince Edward Island. 1988. Payday Loans Act, RSPEI, c P-2.1. Accessed on July 24, 2017. https://www.princeedwardisland.ca/sites/default/files/legislation/p-02_1.pdf
  38. ———. 2015. Payday Loans Act Regulations, Chapter P-2.1, at s 24. Accessed on July 24, 2017. https://www.princeedwardisland.ca/sites/default/files/legislation/p02-1g.pdf
  39. Government of Saskatchewan. 2007. The Payday Loans Act, SS 2007, c P-4.3. Accessed on July 24, 2017. http://www.qp.gov.sk.ca/documents/English/Statutes/Statutes/P4-3.pdf
  40. ———. 2012a. The Payday Loans Act, SS 2007, c P-4.3. The Statutes of Saskatchewan. Accessed on July 24, 2017. http://www.qp.gov.sk.ca/documents/English/Statutes/Statutes/P4-3.pdf
  41. ———. 2012b. The Payday Loans Regulations, c P-4.3, Reg 1, at s. 23(1). Accessed on July 24, 2017. http://www.qp.gov.sk.ca/documents/English/Regulations/Regulations/P4-3R1.pdf
  42. Government of the United Kingdom. 1970. Administration of Justice Act 1970, c. 31. Accessed on July 25, 2017. http://www.legislation.gov.uk/ukpga/1970/31/introduction
  43. ———. 1974. Consumer Credit Act 1974, c 39, Part IX. Accessed on July 25, 2017. http://www.legislation.gov.uk/cy/ukpga/1974/39/part/IX/data.xht?wrap=true
  44. Government of the United States. 2008. Consumer Financial Protection Bureau. Accessed on July 25, 2017. https://www.consumerfinance.gov/about-us/the-bureau/
  45. Government of the United States (CFPB). 2016. Consumer Financial Protection Bureau Proposes Rules to End Payday Debt Traps. June 2. Accessed on July 25, 2017. http://files.consumerfinance.gov/f/documents/CFPB_Proposes_Rule_End_Payday_Debt_Traps.pdf
  46. Government of the United States. 2017. Payday, Vehicle Title, and Certain High-Cost Installment Loans. November 11, 2017. https://www.gpo.gov/fdsys/pkg/FR-2017-11-17/pdf/2017-21808.pdf. Accessed 27 December 2017.
  47. Iacobucci, E., and M. Trebilcock. 2012. The Role of Crown Corporates in the Canadian Economy. 5:9 The School of Public Policy Research Papers 1. Toronto: Faculty of Law, University of Toronto.Google Scholar
  48. Kitching, A. 2006. Bill C-26: An Act to Amend the Criminal Code (Criminal Interest Rate). Legislative Summary LS-541 E. (Revised on September 28, 2007). Library of Parliament. Accessed on July 24, 2017. http://www.lop.parl.gc.ca/Content/LOP/LegislativeSummaries/39/1/c26-e.pdf
  49. Kitching, A., and S. Starky, 2006. Payday Loan Companies on Canada: Determining the Public Interest. Legislative Summary (PRB 05-81E), Parliamentary Information and Research Service, Library of Parliament of Canada. Accessed on July 24, 2017. http://www.lop.parl.gc.ca/contents/lop/researchpublications/prb0581-e.pdf
  50. Lo, J. 2011. A Criminal Rate of Interest: Updating Garland for Consumers. Ottawa: Public Interest Advocacy Centre. Accessed on July 24, 2017. https://www.piac.ca/wp-content/uploads/2014/11/GarlandUpdate_FINAL
  51. Manitoba Public Utilities Board. 2008. Public Utilities Board Rules of Practice. Accessed on July 27, 2017. http://www.pubmanitoba.ca/v1/pdf/pandp/rules_pandp_mar07.pdf
  52. News Release – Manitoba. 2013. New Rules Would Add Protections for Consumers Using High-Interest Loans. Accessed on July 27, 2017. http://news.gov.mb.ca/news/?item=19831&posted=2013-12-04
  53. Nova Scotia Utility and Review Board. 2015. NSUARB 64. Accessed on July 24, 2017. https://nsuarb.novascotia.ca/sites/default/files/m06084_payday_loans_decision.pdf
  54. Ontario Superior Court of Justice. 2014. The Director v The Cash Store, 2014 ONSC 980. Google Scholar
  55. Oxford Dictionary. 1884. Usury. In Oxford Dictionary. Accessed on July 21, 2017. https://en.oxforddictionaries.com/definitions/usury
  56. Parkin, M., and R. Bade. 2006. Micro Economics: Canada in the Global Environment. 6th ed. Toronto: Pearson Addison Wesley.Google Scholar
  57. Pew, N. 1946. The Pew Charitable Trusts. Accessed on July 25, 2017. http://www.pewtrusts.org/en/about/mission-and-values
  58. Public Utilities Board. 2008. Maximum Charges for Payday Loans, PUB Order No. 39/08. Manitoba. Accessed on July 24, 2017. http://www.pubmanitoba.ca/v1/proceedings-decisions/orders/misc07on.html
  59. ———. 2013. Payday Loans Review, PUB Order No. 38/13. Manitoba. Accessed July 25, 2017. http://www.pubmanitoba.ca/v1/pdf/misc/38_13.pdf
  60. ———. 2016. Report on Payday Loans Review. Manitoba, June 17. Accessed on July 25, 2017. http://www.pubmanitoba.ca/v1/payday_loan/2016_payday_loans_review_report.pdf
  61. Rt Hon Justin Trudeau. 2017. New Ministers to support the renewed relationship with Indigenous Peoples. Accessed on February 4, 2018. https://pm.gc.ca/eng/news/2017/08/28/new-ministers-support-renewed-relationship-indigenous-peoples
  62. Selinger, G. 2017. Conversation on the Origin and Development of Payday Lending Regulations in Manitoba. Interviewer K. Dilay, Winnipeg, January 27.Google Scholar
  63. Stewart, J., and J. Sinclair. 2007. Meaningful Public Participation in Environmental Assessment: Perspectives from Canadian Participants, Proponents, and Government. 9:2 Journal of Environmental Assessment Policy and Management 161, 162.Google Scholar
  64. Supreme Court Judgments. 1998. Garland v Consumers’ Gas Co., 3 SCR 112. Ontario. Accessed on July 24, 2017. https://scc-csc.lexum.com/scc-csc/scc-csc/en/item/2138/index.do
  65. The City of Calgary, City Council. 2007. Land Use Bylaw – 1P2007, at s 254.1(c). Land Use Bylaw Sustaining Team, Development and Building Approvals, Planning Implementation. Accessed on July 27, 2017. http://www.calgary.ca/PDA/pd/Documents/Calgary-Land-Use-bylaw-1P2007/bylaw_1p2007.pdf
  66. The Financial and Consumer Services Commission of New Brunswick. 2017. Saint John. http://0104.nccdn.net/1_5/046/09d/2c6/Bulletin---2017-006---Payday-Loan-Implementation.pdf. Accessed 27 December 2017.
  67. The Pew Charitable Trusts. 2012, July. Payday Lending in America: Who Borrows, Where They Borrow, and Why. Washington, D.C.: Pew Safe Small-Dollar Loans Research Project. Accessed on July 25, 2017. http://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2012/pewpaydaylendingreportpdf.pdf
  68. ———. 2013, October. Payday Lending in America: Policy Solutions. Report 3 in the Payday Lending in America Series. Accessed on July 25, 2017. http://www.pewtrusts.org/~/media/legacy/uploadedfiles/pcs_assets/2013/pewpaydaypolicysolutionsoct2013pdf.pdf
  69. Uniform Law Conference of Canada. 2008. Report of the Criminal Section Working Group on Criminal Interest Rate: A Discussion Paper Section 347 of the Criminal Code in Need of Reform. Quebec City. Accessed on July 24, 2017. http://www.ulcc.ca/en/annual-meetings/229-2008-quebec-city-qc/criminal-section-documents/854-criminal-interest-rate
  70. Washington State Department of Financial Institutions. 2015. 2015 Payday Lending Report. Accessed on July 25, 2017. http://www.dfi.wa.gov/sites/default/files/reports/2015-payday-lending-report.pdf

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Katrine Dilay
    • 1
  • Byron Williams
    • 1
  1. 1.Public Interest Law CentreWinnipegCanada

Personalised recommendations