Monday, November 27, 2006

The push for legislation in Nova Scotia on payday advances has come through.

The new rules governing payday loan businesses should help protect consumers and support a viable industry, an industry group said Friday.

The Canadian Payday Loan Association applauded the adoption of Nova Scotia’s Bill 87, the first law in Canada overseeing the regulation of the instant cash loan industry.

The legislation was unanimously passed in the provincial legislature on Thursday.

Payday loan businesses provide small personal loans to cover short-term emergencies. Nova Scotia’s Utility and Review Board is to hold hearings in the spring to set permitted fees charged for borrowing.

The association said the average loan is $300 for about 10 days.

Among other things, the new rules will ensure lenders disclose all fees and give borrowers a day to change their minds about such payday cash loans and cancel them at no cost.

“This is an important day for consumer protection in Nova Scotia,” association president Stan Keyes said of the provincial law being passed.

“It will be important to ensure that the government sets a clear cap on the cost of borrowing that will balance strong consumer protection while ensuring a viable industry that can afford to provide this . . . service,” he continued.

The association says up to two million Canadians use regular or no fax payday loans every year. It has been “calling on governments across the country for two years to introduce and pass effective payday loan legislation,” the release said.

Ottawa is holding hearings on a proposed federal law intended to regulate the industry. The bill is expected to be reviewed by a parliamentary committee before Christmas, the release said.

Other provincial governments are also planning to enact pay day loan legislation.

This entry was posted on Monday, November 27th, 2006 at 6:32 am and is filed under Canada.