New regulations limiting the amount payday lenders can charge on loans will soon come into effect in Ontario.
A new cap of $21 to be charged per $100 borrowed will be in effect starting April 1.
That amount was recommended by an advisory board that consulted the province in drafting its Payday Loans Act.
The rate compares to a $31 charge being proposed in Nova Scotia, $23 in British Columbia and $17 in Manitoba.
Starting in July, the act will also outlaw some industry practices including "rollover" loans, in which borrowers take out a second loan before their first is paid.
The legislation will also give payday borrowers a two-day "cooling off" period to cancel a loan without penalty.
The Canadian Payday Loan Association applauded the new regulations and said they strike a fair balance by protecting consumers without hindering the industry.
But the Ottawa-based Public Interest Advocacy Centre has complained that the $21 charge is "astronomically high" and a "gift to payday lenders."
Canadians borrow an estimated $2 billion a year through payday loans, with Ontario home to more than half of the 1,350 such businesses operating across the country.
Of the 750 payday loan stores in Ontario, almost half are already lending near or below the maximum amount recommended by the board, according to the Ontario government.
A new cap of $21 to be charged per $100 borrowed will be in effect starting April 1.
That amount was recommended by an advisory board that consulted the province in drafting its Payday Loans Act.
The rate compares to a $31 charge being proposed in Nova Scotia, $23 in British Columbia and $17 in Manitoba.
Starting in July, the act will also outlaw some industry practices including "rollover" loans, in which borrowers take out a second loan before their first is paid.
The legislation will also give payday borrowers a two-day "cooling off" period to cancel a loan without penalty.
The Canadian Payday Loan Association applauded the new regulations and said they strike a fair balance by protecting consumers without hindering the industry.
But the Ottawa-based Public Interest Advocacy Centre has complained that the $21 charge is "astronomically high" and a "gift to payday lenders."
Canadians borrow an estimated $2 billion a year through payday loans, with Ontario home to more than half of the 1,350 such businesses operating across the country.
Of the 750 payday loan stores in Ontario, almost half are already lending near or below the maximum amount recommended by the board, according to the Ontario government.
