HAMILTON, ON, Feb. 6 /CNW/ - The Canadian Payday Loan Association (CPLA)
today said that about half of the Ontario payday loan industry will have to
tighten its belts in order to operate under a proposed $21/$100 upper maximum
to be applied to payday loans.
The Ontario Government's independent "Maximum Total Cost of Borrowing
Advisory Board" today recommended the maximum fee for a payday loan should be
$21 per $100 lent.
"The government has a balanced proposal before it that takes into account
consumer protection and the viability of the industry to continue to provide
this needed financial product," said the Hon. Stan Keyes, President of the
CPLA. "But there are some responsible payday lenders - especially in smaller
towns across Ontario - that are going to have to significantly tighten their
belts in order to still operate under this proposed maximum fee."
In addition to today's proposed maximum fee, the advisory board
- Many borrowers are using payday loans effectively and responsibly
- A demand for payday loans exists and the industry must continue to
- Profit margins in the industry are not excessive
- The industry does not prey upon the poor as some advocates suggest
The CPLA has been actively working for 5 years with governments to pass
legislation and implement maximum fees to ensure a balance between a viable
industry and consumer protection.
Many of the elements of Ontario's new regulations are already part of the
CPLA's "Code of Best Business Practices" - introduced four years ago and
monitored by an independent Ethics and Integrity Commissioner to ensure
adherence among CPLA members.
In addition, the CPLA was a partner with the Ontario government to
establish stronger disclosure measures in stores and the CPLA already promotes
consumer education and awareness by posting credit counseling brochures in
every member store.
Upwards of 2 million Canadians have used payday loans to cover small-sum,
short-term emergencies. Loans are capped at $1,500, with the average loan
being $280 for 10 days.
For further information:
For further information: Hon. Stan Keyes - President of the CPLA, (905)
522-2752, Email: firstname.lastname@example.org