PEI: Payday lending regulations introduced
By Mario Cywinski | April 21, 2009
PEI: A legislative bill regulating payday lenders operating in the province was introduced. The new Payday Loans Act will regulate the maximum interest rate that may be charged by lenders and will require full disclosure of loan costs.
Borrowers will not be allowed to obtain new loans if a previous loan has not been paid off. They will also be given a two-day 'cooling off' period.
"Our legislative model adopts a comprehensive approach and will provide the province with the tools necessary to regulate the industry effectively," said Attorney General Gerard Greenan. "It is important that consumers are clearly informed about credit costs and protected from improper business practices."
Interest and fees paid to payday lenders are usually very high. A payday loan is basically a short-term load that is given before a borrower’s payday and is repaid on their next payday, plus fees and interest.
Many provinces have or are in the process of instituting legislation to regulate the payday loan industry. In all, 1,350 storefront payday loan outlets across Canada.
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