EDMONTON, July 31 /CNW/ - The Nova Scotia Utility and Review Board today
issued an Order setting the maximum cost of borrowing that may be charged for
a payday loan at $31 per $100.
In setting this rate, the Board appears to have drawn the following
- Increased competition, accompanied by improved disclosure to
borrowers, will afford proper protection to consumers.
- The Board should set a rate that will foster a healthy competitive
- The Board should avoid setting a maximum rate such that only the
"lowest cost" lenders will remain in the Nova Scotia marketplace.
- A maximum cost of borrowing should recognize the different business
models that exist in the marketplace.
- As a matter of public policy, the intent of recent amendments to the
federal cost of borrowing provisions of the Criminal Code, coupled
with amendments to the Nova Scotia Consumer Protection Act, is to
facilitate - not hinder - the payday loan industry, such that payday
loans will be readily available to those consumers who want them.
Gordon J. Reykdal, Chairman and CEO, commented: "Cash Store Financial
recommended that the Board adopt a market-based approach, and we are satisfied
that it has done so. Our primary concern heading into these hearings was that
the Board would follow the approach taken by the Manitoba Public Utilities
Board, whereby it would set a rate so low that most providers will be forced
from the market and, in doing so, the Board would potentially create a
monopoly for the lowest cost provider. Contrary to Manitoba's anti-market
approach, the Nova Scotia Utilities and Review Board have taken an approach
which is consistent with generally accepted principles of business
"While we have yet to fully analyze the Board Order, our initial reaction
About Cash Store Financial
The Cash Store Financial Services Inc. ("Cash Store Financial") is the
only payday advance broker in Canada publicly traded on the TSX. Cash Store
Financial operates more than 380 branches across Canada under two banners: The
Cash Store and Instaloans.
The Cash Store and Instaloans act as brokers to facilitate payday advance
services to income-earning consumers who may not be able to obtain small
short-term loans from traditional banks. Cash Store Financial also provides a
private-label debit card, The Freedom Card, and other ancillary products.
Cash Store Financial employs more than 1,500 associates and is
headquartered in Edmonton, Alberta.
For further information:
For further information: Gordon J. Reykdal, Chairman and Chief Executive
Officer, Cash Store Financial, (780) 408-5118 or Michael J.L. Thompson, Senior
Vice-President and Corporate Secretary, Cash Store Financial, (780) 408-5595
or cell: (780) 934-4729