Gov't Will Change Payday Loan Plan
Manitoba's provincial government moved yesterday to carry on with the planned regulation of payday loan rates, hopeful it will render a court challenge to be essentially moot.
Manitoba's Court of Appeal recently agreed to allow The Cash Store to challenge the authority of the provincial Public Utilities Board to cap the rates payday lenders could charge their customers.
The government had asked the PUB to look at the rates being charged and come up with regulated rates that would be fair. The PUB ordered last April the maximum would be 17% on the first $500, 15% on the next $500 and 6% on loans over $1,000.
But now that The Cash Store has won the right to formally challenge the PUB's authority to do that, Finance Minister Greg Selinger said he decided yesterday the government will change the rules and regulate the rates itself. He will introduce legislation this spring that allows that change.
Selinger said The Cash Store has the right to challenge that authority, too, but suggested the company wouldn't be successful. "I don't think there's any doubt the government has the right to protect consumers," he said.
Meanwhile, Selinger also decided yesterday to put into effect payday loan rules that have been on the books since 2006 but were not yet officially in effect because they hadn't been proclaimed.
COOLING-OFF PERIOD
Those rules -- introduced in the Consumer Protection Amendment Act, which became law in December 2006 -- include the right for borrowers to have a 48-hour cooling-off period to cancel their loans, strip payday lenders of the right to garnishee wages or seize securities like vehicles, and require lenders to disclose all fees and charges at the time of the loan, among other regulations.
Those rules were proclaimed yesterday and will come into effect March 9.
Selinger said the government had been waiting to proclaim them as one package with the new rate caps. Since the rate process is now taking so long, he decided to go ahead with the other rules in the meantime.
Source: http://www.winnipegsun.com/ |
