Ontario reducing cost of borrowing for payday loans

As anticipated, Ontario is lowering the maximum total cost of borrowing for a payday loan from $21 per $100 borrowed to $18 per $100 borrowed, effective January 1, 2016. Ontario is also proposing additional amendments to the law governing payday loans (under Bill 59, Putting Consumers First Act (Consumer Protection Statute Law Amendment), 2016), which, if passed, would introduce optional extended prepayment periods for repeat borrowers, restrictions on high-frequency borrowing, and establishing standards or factors that payday lenders have to take into account when determining whether a borrower has the ability to repay. Bill 59 has passed second reading and is currently with the Standing Committee on Social Policy.

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