HAMILTON, ON, April 23 /CNW/ - The Canadian Payday Loan Association (CPLA) said today's announcement by the Manitoba government of a cap on fees for the payday loan industry and a restriction on the amount that can be borrowed will impact consumers by denying access to credit for Manitobans who need it most.
The CPLA said the decision overlooks independent evidence of the actual costs of providing the payday loan product across the industry, will result in more strict lending criteria for consumers and will ultimately drive many small and medium-sized companies out of business, further restricting access.
The government has announced that the maximum rate for a payday loan will be set at $17 per $100, which is significantly below the rates set in other provinces. Lenders will be unable to meet the needs of some consumers because they will be prohibited from providing them with a loan that is more than 30 per cent of their net pay - ignoring the fact that loans are needed to cover off emergencies.
"Today's announcement is bad for consumers," said Stan Keyes, President of the Canadian Payday Loan Association. "Despite the government's stated intent to strike the right balance, today's move fails to recognize that a viable industry is needed in order to serve those who need access to short-term loans," said Keyes. "We are disappointed and find it ironic that the government's decision will in the end reduce access to credit for consumers by reducing the number of outlets that provide this needed service," added Keyes.
Representing 24 responsible payday loan companies across Canada, the CPLA has always supported regulation and has worked closely with the federal and provincial governments to achieve a regulatory framework for the payday loan industry that both protects consumers and allows for a viable competitive payday loan industry. To date, the provinces of British Columbia, Alberta, Ontario and Nova Scotia have enacted and proclaimed regulations governing the payday loan industry. The provinces of Saskatchewan, Manitoba, Prince Edward Island and New Brunswick have passed Acts and are in the process of finalizing regulations. Each province sets a maximum rate that can be charged for a loan which is expressed as an amount per hundred dollars lent.
SOURCE Canadian Payday Loan Association (CPLA)
For further information: For further information: Hon. Stan Keyes - President of the Canadian Payday Loan Association, Office: (905) 522-2752, Mobile: (905) 645-4434, Email: firstname.lastname@example.org