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Tougher Rules On Payday Loans, Cheque-Cashing Fees – New Website Info

Victoria – The Province is starting to tighten the rules to rein in payday-lending practices, and to protect people from excessive fees when cashing BC Employment and Assistance cheques.

For some time, British Columbia’s most financially vulnerable individuals have used non-traditional lenders and credit providers, who often impose high borrowing costs and debt loads on borrowers.

Starting June 25, 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.

As part of its public education efforts, the Province has launched a new website called Borrowing Money. This website will provide people with information to consider before taking out a loan of any kind. The content on this website will allow anyone in B.C. to become informed and educated on various credit products and services, what rights borrowers have, and where to go for assistance.

Limits on fees for cheque cashing, and high-cost loans, will go into effect on September 1, 2018, as follows:

Strengthen payday-loans protections:

  • 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.

 

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