Province introduces new bill to make payday loans lowest in country
Posted May 12, 2016 9:49 pm.
This article is more than 5 years old.
The province is clamping down on payday lenders and what it calls “predatory lending.”
Service Alberta Minister Stephanie McLean introduced Bill 15 to legislature on Thursday, which will slash what payday loan companies can charge.
“Albertans told us they want us to reduce the cost of lending,” she said. “We have significantly reduced the cost of lending. From $23 on every $100 borrowed to $15 on every $100 borrowed. That’s the lowest in the country.”
Some payday loan companies have said they need to charge such high rates because people will often default, but the minister said the the high rates are likely behind the defaults.
“Certainly, I would suggest that some of these loans are high-risk and difficult to pay back and the default rates are higher because the interest rates are high. Albertans have asked us to ensure that they’re protected.”
The province has tapped some banks to offer similar short-term loan products.
The Canadian Payday Loan Association has said in the past that any change in rates could drive many of its members out of business.
