OTTAWA, October 6, 2006 The Honourable Vic Toews, Q.C., Minister of Justice and Attorney General of Canada, together with the Honourable Maxime Bernier, Minister of Industry, today introduced proposed amendments to the Criminal Code regarding payday lending, to provide provinces and territories with the flexibility to regulate the industry.
"As more Canadians make use of payday lending, Canada's New Government is taking steps to ensure that the industry can be properly regulated," said Minister Toews. "We're getting things done for families and taxpayers, by giving provinces and territories the tools they need to protect consumers and deal with questionable business practices."
"The amendments to the Criminal Code will give provinces and territories the flexibility they need to deal with any concerns they may have with payday lending," said Minister Bernier. "As federal consumer minister I am committed to consumer protection, and I strongly support this bill."
THE CRIMINAL CODE :
Currently, under section 347 of the Criminal Code of Canada, it is an offence to enter into an agreement or arrangement to receive interest at a criminal rate (defined as exceeding 60% per annum), or to receive a payment of interest at a criminal rate.
However, section 347 was designed to target loan sharking and its links to organized crime, and is NOT a consumer protection tool.
CONSUMER PROTECTION :
Under the proposed amendments, payday lenders who operate in provinces or territories having measures in place to protect borrowers will be exempt from section 347 of the Criminal Code.
This means the provinces and territories can set limits on the cost of borrowing and regulate the business practices of payday lenders within their jurisdiction.
Provincial and territorial consumer ministers, as well as consumer advocacy groups, have raised concerns over the questionable practices within the payday lending industry such as the high cost of borrowing, insufficient disclosure of contractual terms, unfair collection practices, and the spiralling debt loads resulting from rolling over loans.
An online version of the legislation will be available at www.parl.gc.ca.
Payday Lending Legislative Amendments
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Ref.:
Mark Quinlan
Press Secretary
Office of the Minister of Justice
613- 992-4621
Isabelle Fontaine
Office of the Honourable Maxime Bernier
Minister of Industry
613- 995-9001
Media Relations Office
Department of Justice Canada
613- 957-4207
Media Relations
Industry Canada
613- 943-2502
