Ontario is moving to strengthen protections for payday loan customers by reviewing the Payday Loans Act.
The review of this 2008 legislation comes in response to a number of changes in the rapidly evolving payday loan industry, including the emergence of online transactions, smartphone-enabled loan approvals and new forms of high-cost, short-term loans. The review of Ontario’s Payday Loans Act, 2008, will:
- Assess the ability of the current legislation to protect consumers using new online and mobile apps to access short-term payday loans
- Explore ways to track payday loans and ensure companies are compliant with existing regulations
- Study stronger protections for consumers against multiple loans and roll-over loans
- Review the maximum total cost of borrowing, which is currently capped at a $21 fee for every $100 borrowed
- Examine the impact on customers of new short-term, high-cost loan products that have recently entered the marketplace
Protecting Ontario consumers is part of the government’s plan to ensure a fair marketplace and help people in their everyday lives.
- More than 750 payday loan storefronts are located in the province.
- Consumers who take out an average payday loan of $300 can pay up to $63 in fees.
- Since 2008, inquiries to the Ontario government about payday loans have increased nearly tenfold, from 141 to 1,324.
- Payday Loans Act, 2008.
- The rights of payday loan customers.