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

22nd year of smoke and noise

Bulkley Valley Drag Racing Assoc categories: Super Pro, Pro, Bike Sled, Diesel, and Junior Dragster.

BV medals at BCs

Two Smithers Secondary School 2018 graduates medaled at the B.C. Athletis Championship in Coquitlam.

One wheeled skateboard ready for camps

Next Smithers skateboard camp is Aug. 7-9.

Lake Babine Nation councillor resigns before being sworn in

Paul Joseph steps down before being sworn in

Kevin Kriese becomes chair of the Forest Practices Board

Smithers’ Kriese’s three-year appointment beings August 7.

Here’s what you need to know about Day 2 at the BC Games

From equestrian to volleyball to swimming, all 18 events in full swing here in the Cowichan Valley

B.C. mining company, involved in 2014 spill, ordered to pay lost wages

Mount Polley Mining Company must pay wages to 26 employees who were laid off without proper notice

Two significant wildfires burning in southeastern B.C.

More than 20 fires were burning in the Southeast Fire Centre as of Saturday afternoon

Volunteers provide the glue that keeps BC Games moving

The 2018 Cowichan Summer Games had more than 2,300 volunteers on hand across Vancouver Island

No Name brand chicken nuggets recalled due to possible salmonella

Canadian Food Inspection Agency says multiple illnesses reported in B.C., Alberta and Ontario

Lodeiro scores twice to help Sounders beat Whitecaps 2-0

Seattle’s Nicolas Lodeiro opened the scoring in the fifth minute when he converted a penalty kick

Race walker breaks 18-year-old BC Games record

Zone 6 athlete Olivia Lundman crossed finish line with ease, to loud cheers in Cowichan

PHOTO GALLERY: BC Games Day 2

A brief look at action from the 2018 BC Summer Games in the Cowichan Valley

BC Wildfire update on 14 major Okanagan blazes

Watch the media briefing on the current fire situation in the Okanagan.

Most Read