Board Recommends Limit On Costs Of Payday Loans
February 6, 2009 7:28 PM
Government To Determine Final Maximum Rate
Following months of consultations and research, the Board recommends that an upper limit of $21 per $100 borrowed be set as the maximum total cost to borrowers under a payday loan agreement. The Board states this recommendation strikes an appropriate balance between the interests of consumers and the long-term competitiveness of the payday lending industry across the province.
Board members Paul Vessey and Brady Irwin submitted their report to Harinder Takhar, Minister of Small Business and Consumer Services. The report further recommends that the government should not establish different upper limits on the total cost of borrowing for different classes of borrowers.
Minister Takhar will review the Board's report and consult with cabinet colleagues on the Government's final decision.
QUICK FACTS
- There are approximately 750 payday loan store fronts in Ontario.
- In 2007 the federal government passed Bill C-26, allowing provinces to apply for designation to limit the total cost of borrowing for payday loans. Prior to this decision, the payday lending industry was largely unregulated at the provincial level.
LEARN MORE
CONTACTS
- Stephen Puddist
Borrowing Advisory Board
416-326-7304
ontario.ca/consumerservices
"We consulted with a broad range of experts and interested parties to ensure that we heard and understood the concerns of the community and the industry."
– Paul Vessey
Board Member
"I am satisfied that our recommendation accurately reflects the mandate we were given. Payday loan consumers would be protected and the industry would remain competitive, especially within the more stable regulatory environment to come. "
– Brady Irwin
Board Member
Communities
