British Columbia to reduce cap on ‘devastating’ payday loans

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The Government of British Columbia is taking action to reduce the interest rates charged on payday loans.

The maximum allowable fees for a payday loan in British Columbia will increase from $ 23 to $ 17 for every $ 100 borrowed, effective January 1, 2017.

The Ministry of Public Safety and Solicitor General says the changes mean British Columbia’s borrowing rates for high-cost short-term loans will be the second lowest in Canada.

Prior to 2009, fees for payday loans in British Columbia were as high as $ 30 for every $ 100 borrowed.

The ministry said in a press release that regulators will also consult with credit counselors, advocacy organizations, loan providers and others as the province seeks to improve protection for consumers who rely on loans on salary.

The 30-day consultation will examine issues ranging from consumer education and information to the development of innovative lower-cost loans that could turn consumers away from more expensive options.

“I have seen first-hand the devastating impact these short-term, high-interest payday loans have on our communities. Tyler Shymkiw, in the press release.

Central 1 Credit Union regional manager Anna Hardy says she applauds any solutions that keep borrowers from getting trapped in a cycle of personal debt, and adds that she looks forward to speaking with the province at this. topic.

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