British Columbia is amending consumer-protection law to offer more safeguards for people forced to turn to high-cost loan services and risk being caught in an endless cycle of debt payments.
Solicitor-General Mike Farnworth says proposed amendments to B.C.’s Business Practices and Consumer Protection Act will set limits on borrowing costs, prohibit certain fees and charges and restrict the use of borrowers’ personal information.
The minority New Democrat government highlighted stronger consumer-protection measures in its Throne Speech earlier this month, saying it plans to crack down on unfair payday-loan practices.
British Columbia MLA Mike Farnworth arrives to the Legislative Assembly Management Committee meeting in the Douglas Fir room at Legislature in Victoria on Dec. 6, 2018.CHAD HIPOLITO/The Canadian Press
Last June, the government capped fees for cashing assistance cheques at $2 plus 1 per cent of the value of the cheque up to a maximum of $10 and lowered the maximum fees for payday loans to $15 for every $100 borrowed.
Mr. Farnworth says the amendments seek to improve affordability for people using payday loans and other high-credit products and establishes a new licensing and regulatory system for high-cost loan providers.
He says the legislation will also establish a new consumer-education fund to help people better understand and prevent financial problems.
“There are consumers who have limited options and seek high-cost loans and other high-cost credit products from alternative lenders, often with terms and conditions that aren’t fair,” Mr. Farnworth said. “This bill proposes measures to strengthen existing payday-lending laws.”
The Canadian Press