British Columbia is amending its consumer protection law to provide more guarantees for those forced into high-cost loan services and at risk of being caught in a never-ending cycle of debt repayment.
Solicitor General Mike Farnworth said proposed changes 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 information personal borrowers.
The minority NDP government highlighted tougher consumer protection measures in its Speech from the Throne earlier this month, saying it planned to crack down on unfair payday lending practices.
Last June, the government capped the fee for cashing assistance checks at $ 2 plus one percent of the value of the check to a maximum of $ 10 and lowered the maximum fee for payday loans to $ 15. $ for every $ 100 borrowed.
Farnworth says the changes aim to improve affordability for people using payday loans and other high-credit products and establish a new system of authorization and regulation 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.
“Some consumers have limited options and seek high cost loans and other high cost credit products from other lenders, often with terms that are not fair,” Farnworth said.
“This bill proposes measures to strengthen existing laws on payday loans.”