Keeping in step with recent developments in Ontario and Manitoba, the Alberta Government has introduced Bill 15, An Act to End Predatory Lending (the “Alberta Payday Loans Bill”). Changes proposed in the Alberta Payday Loans Bill include:
- Reducing cost of borrowing fees from $23 o $15 per $100 borrowed, which will make Alberta have the lowest rate in Canada (Manitoba has the lowest at $17 per $100, followed by Ontario at $21 per $100)
- Allowing borrowers to repay loans in installments
- Requiring lenders to provide borrower’s with information on financial literacy resources
- Prohibiting the direct solicitation of potential borrowers
- Prohibiting charging fees to cash cheques for a payday loan
- Prohibiting solicitation, negotiation or concluding an agreement for another form of credit with a borrower while the borrower has a payday loan outstanding
The Alberta government has introduced the Alberta Payday Loans Bill in response to concerns regarding predatory lending in the province. The government is also working with credit unions to discuss alternative options for short-term loans for borrowers.
The Canadian Payday Loan Association has expressed concern regarding the Alberta Payday Loans Bill and anticipates a reduction of the industry in Alberta should the bill become law. There are over 30 payday lenders operating in Alberta.