Payday loan fees drop in Nova Scotia

Payday loan companies operating in Nova Scotia will be hit by a small reduction in what they can charge for their payday loans a defeat for an industry that has tried to maintain Canada’s second highest fees.

Nova Scotia regulators reduced the referral fee from $ 22 per $ 100 to $ 19 in a decision released Tuesday. The prices are in effect in February 2019.

The decision affects four companies: National Money Mart, Cash Money, 310-Loan and My Canada Payday.

In its decision, the Nova Scotia Public Services and Review Board did not change the maximum amount that could be loaned – $ 1,500 – or the default fee of $ 40 and 60% interest on loans. arrears.

How Nova Scotia Compares to All of Canada

Only Prince Edward Island has a higher referral fee of $ 25 per $ 100.

The cost per $ 100 in New Brunswick, Ontario and Alberta is $ 15 and $ 17 in British Columbia, Saskatchewan and Manitoba. Newfoundland and Labrador offers a fee of $ 21.

Quebec does not regulate payday loans.

The Nova Scotia board of directors has rejected arguments from payday lenders for the $ 22 rate to be maintained on the grounds that it would hurt the industry. He accepted industry evidence that lower maximum rates caused some lenders to exit the markets.

The board also rejected a recommendation from the Face of Poverty Coalition for a rate of $ 2.25 per $ 100, saying it would “effectively wipe out” the payday lending industry in Nova Scotia.

“The board recognizes that eliminating the regulated payday loan industry in Nova Scotia would reduce the short-term credit options available to consumers and increase the presence of unscrupulous and unregulated lenders,” he said. he writes in his decision.

56% of loans are repeats

As in previous reviews, recurring borrowers were a problem for regulators. In Nova Scotia, 56% of loans were renewed in 2017, involving 18,795 borrowers.

Almost a third of repeat borrowers had eight or more loans.

The board reiterated its recommendation from previous payday hearings for restrictions on repeat or concurrent loans from multiple lenders.

The Nova Scotia government said it was not possible to create a loan tracking database due to confidentiality and cost reasons.

The council said it would recommend to the province that borrowers be given more time to repay a loan.

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