New payday loan rules in effect02 January 2018
SAINT JOHN (GNB) – New rules to protect New Brunswick consumers who take out payday loans came into effect on Jan. 1.
The maximum amount payday lenders can charge is now $15 per $100 borrowed, including all charges and fees. This is among the lowest fees in Canada. The new rules also allow consumers to change their minds and cancel a payday loan within 48 hours, without paying any charges.
“The new rules are similar to those across the country and offer better protection and information to those who feel the need to take out a payday loan,” said Rick Hancox, CEO of the Financial and Consumer Services Commission. “We want New Brunswickers to have confidence that payday lending is well-regulated. These new rules help to strengthen that confidence.”
The commission is responsible for the enforcement of the new act and rules, which help consumers by:
- Requiring all payday lenders to be licensed with the commission.
- Allowing the commission to take action on unlicensed activity and against those not in compliance with the legislation.
- Requiring payday lenders to display posters showing the rates charged.
- Limiting payday lenders from issuing a consumer more than one loan at a time or extending or renewing a loan at an additional cost.
- Limiting payday lenders from giving consumers a loan for more than 30 per cent of their net pay.
- Making insurance on the loan optional.
Consumers can check out the commission’s website for information on the new rules, what is involved in taking out a payday loan, and how to make informed credit decisions.
Payday loan infographics:
- What are the rules for payday lenders?
- Can a payday lender do that?
- How do payday loans work?
- What does a payday loan cost?
The Financial and Consumer Services Commission has the mandate to protect consumers and enhance public confidence in the financial and consumer marketplace through the provision of regulatory and educational services. It is responsible for the administration and enforcement of provincial legislation that regulates the following sectors: securities, insurance, pensions, credit unions, trust and loan companies, co-operatives, and a wide range of other consumer legislation. It is an independent Crown corporation funded by the regulatory fees and assessments paid by the regulated sectors. Online educational tools and resources are available.