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

PHOTOS: Thousands show for 40th GoodLife Marathon in downtown Victoria

New records, first-time runners, and stories of resilience

Here comes the rain: Victoria can expect post Thanksgiving showers all week

Mild, rainy weather expected from Tuesday to Saturday

Opponents of Elizabeth May criticize her push to scrap temporary foreign worker program

May has proposed to scrap the federal program which supplies local business with temporary workers

Victoria woman uses loss to raise awareness of Pregnancy and Infant Loss Awareness Day

City of Victoria to recognize Pregnancy and Infant Loss Awareness Day Oct. 15

Calling all little yogis

Saanich yoga studio offering yoga classes for kids to encourage emotion control, healthy lifestyle

VIDEO: Langley woman’s security camera records its own theft

Langley family discovers early morning grab was recorded

Canadian Snowbirds plane crashes before air show in Atlanta

Pilot lands safely after ejecting from jet

Share crash data, private insurers tell David Eby, ICBC

B.C. monopoly makes drivers retrieve their own records

B.C. VIEWS: Wolf kill, not backcountry bans, saving caribou

B.C.’s largest herds turn the corner from extinction

Pearson nets shootout winner as Canucks clip Flyers 3-2

Vancouver picks up second straight home win

Map on Elections Canada website sends Nanaimo-Ladysmith voters to landfill

Address for polling station correct, but Google Map address differs

BC Children’s Hospital launches 2 new virtual care sites bringing total to 19 across province

Provincial initiative allows pediatric patients to see health specialists through video

‘Wham-bam out the door’: Surrey man’s front yard left ruined by scamming landscaper

Resident warns neighbours to be careful of door-to-door salesmen

Most Read