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.

 

 

 

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

One dead as fish boat sinks off southern Vancouver Island

Shawnigan Lake-registered Arctic Fox II went down off Cape Flattery, west of Victoria

Saanich council seeks more information after hearing Uptown-Douglas plan

Council asks for further reports on economic, housing, transportation plans for corridor

Three active COVID-19 cases on Vancouver Island

Since July 24, Central island has had five new cases, North one, South none

Victoria police seize replica handgun and bullets

Unrelated call leads police to functional replica

Flaming object thrown through Victoria restaurant window

Police looking for any witnesses to early-morning incident

Man, 54, charged in connection with fatal attack of Red Deer doctor

Doctor was killed in his walk-in clinic on Monday

Landlord takes front door, windows after single B.C. mom late with rent

Maple Ridge mom gets help from community generosity and government

42 more people test positive for COVID-19 in B.C.

The province has recorded no new deaths in recent days

Joe Biden selects California Sen. Kamala Harris as running mate

Harris and Biden plan to deliver remarks Wednesday in Wilmington

Lawsuit launched after Florida child handcuffed, booked and briefly jailed

Suit alleges “deliberate indifference” to what should have been handled as a behavioural issue

Russia approves vaccine, Putin hopes to begin mass production

Critic calls decision to proceed without thorough testing ‘dangerous and grossly immoral’

Doctor slain in Alberta medical clinic was devoted father, husband

Red Deer doctors on edge after attack on colleague who had two young daughters

Feds offer ‘life preserver’ funds to BC Ferries as pandemic sinks revenue

For every dollar the province spends the federal government will match

Most Read