The Manitoba government is moving forward with measures to better protect Manitoba consumers by proclaiming significant payday loan legislation provisions and committing to introducing legislation that would regulate interest rates, Finance Minister Greg Selinger announced.
“Proclaiming the legislation will increase protection for consumers who take out short-term loans,” said Selinger. “Borrowers must have as many tools as possible to protect themselves against questionable business practices and exorbitant loan rates.”
As a result of the proclamations, new measures that would occur after March 9 include:
• consumers would have the right to cancel a payday loan within 48 hours without charge;
• payday loan agreements would have to be in a form acceptable to the director of the Consumers’ Bureau and would have to include the following information:
• the amount and term of the loan including an itemized list of all fees and charges and the total cost of the loan;
• a statement that the loan is a high-cost loan;
• notice of cancellation rights; and
• contact information for the Consumers’ Bureau;
• payday lenders would be required to provide the borrower with information about the lender’s privacy policy;
• payday lenders would be required to provide the borrower with a copy of the completed and signed agreement;
• wages would not be able to be assigned to a payday lender; and
• payday lenders would be prohibited from taking security for a payday loan. For example, lenders would not be able to secure an interest in a borrower’s car.
Selinger noted the court of appeal recently allowed a lender to appeal the Public Utilities Board order on maximum loan rates.
“While this ruling means the government cannot proclaim the rates at this time, we are committing to introduce legislation that will enable us to move forward in this regard,” he said.
Once the provincial legislation is proclaimed, Manitoba will seek a revised federal order designating the province the authority to set interest rates, as per the Criminal Code of Canada.
