Correction: An earlier version of this story said that upcoming legislation on high-credit lenders included companies that offer payday loans. In fact, the new legislation does not cover payday lenders, which were covered by legislation enacted in 2019.
The Newfoundland and Labrador government is set to introduce regulations for high-interest credit lenders, such as those that offer financing for renting household furniture, renovations or vehicles.
Dutch Minister of Government and Digital Services Sarah Stoodley said in a recent interview that the province will become the fifth in Canada to implement such regulations, which will affect lenders offering loans with interest between 27 and 35 percent, what she called a "criminal interest rate." ".
"We're going to have strict disclosure requirements. You know, allow people to have a cooling-off period. People can't be [incentivized] with a gift to entice them into a high-interest loan, for example," he told CBC News.
Alberta, British Columbia, Manitoba and Quebec have similar regulations, detailing practices that will be banned in June, such as prohibiting automatic deductions from a borrower's bank account and prohibiting lenders from contacting friends, family or employers in an attempt to collect. the pay.
Stoodley said the regulations also aim to improve transparency by giving borrowers the option to change their mind within four business days (rather than two days) without penalties.
"We want to make sure that if someone enters into an agreement on a high-cost credit product, whether it's a loan or a type of rental, [or] furniture lease-to-own agreement, that it's really clear from the beginning what all the terms are going to be, all the fees, all the interest rates, what the final price is going to be," Stoodley said.
"Companies that sell these high-interest products have to make it very clear how much they are paying."
Stoodley said the regulations would likely be enforced through a complaints system, but the department could also investigate lenders and revoke licenses if necessary.
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