Thursday, July 29, 2010

Anti-usury regulation hits snag

The Manitoba government has introduced legislation to limit the interest rates charged by payday lenders. Naturally the moneylenders aren't taking this lying down:

Manitoba's crackdown on payday loan shops has hit another snag: A quick-cash company has asked a federal judge to quash new provincial caps on fees and interest rates.

The Edmonton-based Cash Store argues Manitoba's fee cap is "unreasonably low," well below what other provinces allow and so low it will cause irreparable harm to payday lenders.

From the Free Press. And what are those "unreasonably low" rates?
Manitoba's new rules cap interest and fees at $17 for every $100 loaned -- the lowest fees in the country. To protect people from a spiralling cycle of debt, a loan can only be made for 30 per cent of a person's next paycheque. A host of other regulations protect the poor by ensuring all fees are explained in plain English and lenders can't use rewards or incentives to woo borrowers.
My goodness. Those poor moneychangers will have a hard time finding two platinum Maple Leafs to rub together under those rules...

2 comments:

Stimpson said...

So, other provinces allow higher fees? That tells me nationwide reform is needed.

怡謝伶 said...

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