Maple Ridge Coun. Tyler Shymkiw

Cost of payday loans to drop in B.C.

Maximum allowable charge for a payday loan in B.C. will drop from $23 to $17 for every $100 borrowed.



The borrowing rates of short-term cash loans will be lowered under new regulations announced Wednesday in Maple Ridge.

“Sometimes people need an extra couple hundred dollars to survive between paydays and turn to payday lenders for high-cost, short-term loans,” Minister of Public Safety Mike Morris said in front of Maple Ridge city hall.

Last year, 159,000 people did that.

As result, the government is setting a limit on interest rates charged by payday loan companies.

As of Jan. 1, 2017, the maximum allowable charge for a payday loan in B.C. will drop to $17 from $23 for every $100 borrowed, making it the second-lowest rate in Canada.

That builds on regulations the province implemented in 2009, before which borrowers paid whatever the lender charged – as much as $30 per $100.

Borrowers also had few, limited protections and little recourse against harmful lending practices, such as rollovers, extended repayment terms, disclosure requirements, said a government news release.

The government is also launching a 30-day review of other types of loans, such as installment loans, vehicle-title loans, rent-to-own sales and cheque cashing services.

“These are all expensive ways to borrow money or to purchase goods,” Morris said.

He added that he wants to hear ideas how to help people avoid getting into debt. Rules already require payday lenders to be licenced and to show the full costs of credit.

Maple Ridge Coun.Tyler Shymkiw led the initiative to stop any more payday loan stores from opening in the city.

Under a Maple Ridge bylaw passed in 2015, once an existing store closes, another can’t open.

Last year, there were six local stores in Maple Ridge offering services for as cashing pay cheques or loaning small amounts of money at high interest rates.

Under the bylaw, those stores would stay open, but would be refused a business licence if they closed for more than six months, then tried to re-open.

Shymkiw said, as former chair of the Friends in Need Food Bank, he saw the “devastating effects these short-term, high-interest payday loans have on our communities. “This is a positive step towards improving the lives of families and working people in this province.”

He liked the ongoing consultation on the topic of high-interest lending because it’s always changing. He said the federal government deregulated the payday loan industry in 2006, but now provinces are starting to respond with their own regulations.

“So this is definitely a very positive step in the right direction.”

Scott Hannah, CEO of the Credit Counselling Society of B.C., said high-cost financial service can add significantly to people’s financial problems.

 

 

 

 

Just Posted

Quesnel Kangaroos take round one of playoffs versus Williams Lake

The Roos prevailed 6-4 in an exciting home game over their long time foes.

Educational Family Day fun at the Quesnel Museum and Archives

The museum provided games, scavenger hunts, snacks, a dress-up chest and free admission

Province announces $100-million grant funding for Northwest communities

The Northern Capital and Planning Grant will go to four regional districts and 22 municipalities

Quesnel ringette player excited to help Team B.C.

Katie Young will play centre for the squad at 2019 Canada Winter Games

Ranch Musings: What a wonderful long weekend in Williams Lake

Columnist David Zirnhelt is feeling hopeful after attending the Young Agrarians mixer

B.C. students win Great Waters Challenge video contest

Video, mural and song about saving the salmon claims the top prize

B.C. athlete takes home gold in freestyle aerials at Canada Games

Brayden Kuroda won the event with a combined score of 121.65.

Cabinet likely to extend deadline to reconsider Trans Mountain pipeline

The can’t decide the pipeline’s fate until a new round of consultations with Indigenous communities

B.C. government provides $75,000 towards salmon study

Study looks at abundance and health of Pacific salmon in Gulf of Alaska

Murdered and missing honoured at Stolen Sisters Memorial March in B.C.

‘We come together to make change within the systems in our society’

UBC researchers develop inexpensive tool to test drinking water

The tricoder can test for biological contamination in real-time

Disgraced ex-Congressman Anthony Weiner released from prison

He was convicted of having illicit online contact with a 15-year-old North Carolina girl in 2017

B.C. communities push back against climate change damages campaign

Activists copying California case that was tossed out of court

Most Read