Posted July 10, 2018
Changes to payday-lending practices are earning praise from anti-poverty group BC ACORN.
The provincial government is reducing the maximum fee for borrowing payday loans, from $17 to $15 for every $100 borrowed.
Advocacy groups have lobbied the government for many years, saying that the most financially vulnerable individuals have used non-traditional lenders and credit providers, who often impose high borrowing costs and debt loads on borrowers.
“This is a good step towards tackling the predatory lenders that take advantage of low- and moderate-income people who have no alternative. We are happy that the BC Government is taking the issue of predatory lending seriously and hope they will also increase protections against other types of high-interest lending, too,” said Tabitha Naismith, BC ACORN leader.
Limits on fees for cheque cashing, and high-cost loans, will go into effect on Sept. 1, 2018, as follows:
* Lowering the maximum fee to $15 from $17, for every $100 borrowed, matching the lowest rate in Canada.
* Extending the payday-loan agreement cancellation period, so a payday-loan borrower now has two full business days to cancel the loan without penalty.
* Prohibiting payday lenders from requiring, requesting or accepting consent from a borrower, to use or disclose their personal information for anything other than for arranging or providing a payday loan.
* Clarifying payday lenders' data-reporting timelines. The receipt of more timely data will help Consumer Protection BC to focus its education and compliance efforts, and the data will help to inform government about trends and changes in the industry.
Limit fees for cashing social and disability assistance cheques:
* Capping the fee for cashing a provincial social assistance or disability cheque at $2, plus 1% of the value of the cheque, up to a maximum fee of $10. Note: this change applies to anyone in B.C. who cashes cheques.
Starting June 25, 2018, on the government's website, the ministry is providing practical advice and information to all British Columbians, to help them make informed choices about borrowing money, and using expensive alternative financial services, like cheque-cashing services.
Article by Chris Campbell for Burnaby Now