Maple Ridge Coun. Tyler Shymkiw

Cost of payday loans to drop in B.C.

Maximum allowable charge for a payday loan in B.C. will drop from $23 to $17 for every $100 borrowed.



The borrowing rates of short-term cash loans will be lowered under new regulations announced Wednesday in Maple Ridge.

“Sometimes people need an extra couple hundred dollars to survive between paydays and turn to payday lenders for high-cost, short-term loans,” Minister of Public Safety Mike Morris said in front of Maple Ridge city hall.

Last year, 159,000 people did that.

As result, the government is setting a limit on interest rates charged by payday loan companies.

As of Jan. 1, 2017, the maximum allowable charge for a payday loan in B.C. will drop to $17 from $23 for every $100 borrowed, making it the second-lowest rate in Canada.

That builds on regulations the province implemented in 2009, before which borrowers paid whatever the lender charged – as much as $30 per $100.

Borrowers also had few, limited protections and little recourse against harmful lending practices, such as rollovers, extended repayment terms, disclosure requirements, said a government news release.

The government is also launching a 30-day review of other types of loans, such as installment loans, vehicle-title loans, rent-to-own sales and cheque cashing services.

“These are all expensive ways to borrow money or to purchase goods,” Morris said.

He added that he wants to hear ideas how to help people avoid getting into debt. Rules already require payday lenders to be licenced and to show the full costs of credit.

Maple Ridge Coun.Tyler Shymkiw led the initiative to stop any more payday loan stores from opening in the city.

Under a Maple Ridge bylaw passed in 2015, once an existing store closes, another can’t open.

Last year, there were six local stores in Maple Ridge offering services for as cashing pay cheques or loaning small amounts of money at high interest rates.

Under the bylaw, those stores would stay open, but would be refused a business licence if they closed for more than six months, then tried to re-open.

Shymkiw said, as former chair of the Friends in Need Food Bank, he saw the “devastating effects these short-term, high-interest payday loans have on our communities. “This is a positive step towards improving the lives of families and working people in this province.”

He liked the ongoing consultation on the topic of high-interest lending because it’s always changing. He said the federal government deregulated the payday loan industry in 2006, but now provinces are starting to respond with their own regulations.

“So this is definitely a very positive step in the right direction.”

Scott Hannah, CEO of the Credit Counselling Society of B.C., said high-cost financial service can add significantly to people’s financial problems.

 

 

 

 

Just Posted

LETTER: Thanks to truly angelic Snow Angels

Harrison residents Marg and Ted Doman thank the anonymous snow shovellers who cleaned their driveway

With sport, it’s best to start them young

When facing off on the court as teenagers, some players recall starting their career in elementary

Agassiz churches to come together for night of worship

The joint worship night is an attempt to revive an old event in the community

New Chilliwack YMCA was ‘worth the wait’ say visitors

Family Day will mark officially opening for new building, after sneak peek tours on Saturday

VIDEO: Wheelchairs teach Agassiz students acceptance through sport

Teacher Donna Gallamore brought wheelchairs to the Kent Elementary for learning and fun

NDP Leader Jagmeet Singh calls for public inquiry over SNC-Lavalin questions

Vancouver member of Parliament Jody Wilson-Raybould resigned from cabinet last week

Canadian airlines waiting for guidance from Ottawa over X gender option

Major U.S. airlines said they will change their process so passengers can identify themselves along non-binary lines

Plane flips over at Pitt Meadows airport

Runway closed for an undermined length of time.

Moose Hide campaign takes message to Canadian schools

Campaign launches new K-12 education platform

‘Violent’ B.C. man wanted on Canada-wide warrant

Prince George man with ties to Vernon sought by police

Trudeau’s principal secretary, Gerald Butts, resigns amid SNC-Lavalin furor

Butts categorically denies the accusation that he or anyone else in the PMO improperly pressured former attorney general Jody Wilson-Raybould

UPDATE: Rescue crews for 2 hikers caught up in possible avalanche on Mount Seymour

North Vancouver RCMP say they don’t know what the nature of the call is yet

Deported B.C. man who came to Canada as a baby granted chance at return

Len Van Heest was deported to the Netherlands in 2017

Most Read