When ACORN began organizing around payday lending 5 years ago there were no rules, no licenses, and no rate caps; it was the wild west of lending.
On Friday the Government of Ontario announced that the cabinet has approved the new rate cap and that the provisions of The Payday Loan Act will be coming into effect over the coming months.
ACORN considers the key provisions of the legislation – banning rollover loans, licensing of lenders, 48 hour cooling off period – to be important victories, and an acknowledgement of the predatory practices that had become synonymous with the industry.
In regards to the rate cap that has now been approved by Cabinet; while it’s a step in the right direction, it will mean that Ontario consumers will continue to pay some of the highest rates in North American. Washington DC, New Mexico, Georgia and Manitoba have all brought in lower (and in some cases much lower!) rates caps to protect consumers.
Going forward, we expect that the Province to honour the Boards recommendation to review the rate cap as the industry adjusts, and ACORN will be there to ensure that low income families have their voice heard.