Stronger protections and safeguards to make high-cost credit products more affordable and to better inform people about borrowing money were announced Tuesday by Mike Farnworth, minister of public safety and solicitor general, as part of B.C.’s Consumer Financial Protection Action Plan. (Wikimedia Commons)

Province proposes tougher rules for high-cost loans to help people out of debt cycles

New regulatory framework limits fees, protects consumers

The most financially vulnerable people in B.C. will see new protections put in place to improve affordability in the province, the Minister of Public Safety and Solicitor General announced Tuesday.

Living paycheque to paycheque is a reality for many British Columbians, with high-cost loans from alternative lenders often the only choice when faced with a financial emergency.

In 2016, more than 160,000 British Columbians borrowed more than $369 million in payday loans, or approximately $460 per day on average. A Financial Consumer Agency of Canada report found that the number of Canadians using payday loans more than doubled from 2009 to 2014 – from 1.9 per cent to 4.3 per cent.

RELATED: 2-year investigations nets $900,000 in refunds for payday loan customers

Turning to high-cost loans or other products – with terms and conditions that may be more than borrowers can afford – can leave them trapped in an endless cycle of debt payments, moving them further into poverty.

Stronger protections and safeguards to make high-cost credit products more affordable and to better inform people about borrowing money were announced Tuesday by Mike Farnworth, minister of public safety and solicitor general, as part of B.C.’s Consumer Financial Protection Action Plan.

Proposed amendments to the Business Practices and Consumer Protection Act include setting limits on the total cost of borrowing; prohibiting certain fees and charges; and protecting people from terms and conditions that are unfair.

It will also require businesses that provide high-cost credit products to be licensed by Consumer Protection BC and enables Consumer Protection BC to enforce the amendments and future regulations. Consumer Protection BC will also administer a new consumer financial education fund to enhance consumer financial education throughout the province.

RELATED: B.C. introducing stricter payday-lending law

Consumers will get added protection through the creation of borrowers’ rights and remedies, and protection against potentially harmful and expensive “hard sell” options and enticements to enter into high-cost credit product agreements.

The changes will also restrict the use of borrowers’ personal information.

The proposed changes to the act, if passed, build on previous changes, which introduced tougher rules on payday loans and cheque-cashing fees.

Before 2009, borrowers paid whatever the lender charged – as much as $30 per $100. In 2009, the province implemented regulations that capped the fee at $23 for every $100 borrowed. That number dropped to $17 in 2017 – making it the second-lowest rate in Canada – and further to $15 in 2018.

The new changes aim to assist people out of the debt cycle and make life more affordable for people in B.C., according to the announcement.

RELATED: New B.C. regulations on payday loans don’t address real issues: advocates

Resources:

Borrowing Money website: gov.bc.ca/borrowing-money

Consumer Protection BC: consumerprotectionbc.ca


 

keri.coles@blackpress.ca

Follow us on Instagram
Like us on Facebook and follow us on Twitter.

Just Posted

PHOTOS: New exhibition at Campbell River Art Gallery highlights women’s invisible labour

Exhibition titled Slow Technology features three artists; show runs until May 1

Crab poaching under cover of darkness earns 10-year commercial fishing ban, vessel seizure

A Cape Mudge resident involved in poaching dungeness crabs in Vancouver Harbour… Continue reading

Cortes Island first responder referendum back on the table

Strathcona Regional District passed motion at last meeting to get elector assent

Campbell River schools among those getting provincial playground funds

Penfield Elementary will receive $105,000 for new universally accessible site

Campbell River Storm take 2-0 lead in series against Saanich Braves

The Campbell River Storm hung on for a 2-1 victory in Game… Continue reading

VIDEO: RCMP ask kids to help name soon-to-be police dogs

13 German shepherd puppies will be born this year

Watchdog called after man who yelled racial slurs at B.C. vigil hurt during arrest

BC RCMP say man was ‘acting suspiciously’ at prayer vigil for victims of New Zealand mosque shootings

NDP’s Jagmeet Singh steps into the House of Commons, making history

Burnaby South MP becomes first visible minority to lead a federal party in the House of Commons

Reeling Port Alice about to lose its only bank

Scotiabank branch closure follows latest mill setback, bad for business and the elderly

Simard guilty in Vancouver Island double murder

Convicted of two counts of second-degree murder in 2016 killing of Courtenay couple

Crab poaching under cover of darkness earns 10-year commercial fishing ban, vessel seizure

A Cape Mudge resident involved in poaching dungeness crabs in Vancouver Harbour… Continue reading

‘Considerably large’ tractor tire fell and killed 3-year-old girl on B.C. farm

Delta’s deputy fire chief said crews tried to helicopter girl out after a tractor tire leaning against a barn fell onto her

Nearly 40% of British Columbians not taking their medications correctly: poll

Introduction of legal cannabis could cause more issues for drug interactions

Mining company fined $70,000 after two workers killed in B.C. truck crash

Broda Construction pleaded guilty to failing to provide safe workplace at Cranbrook rock quarry

Most Read