Province cracks down on payday-lending and cheque-cashing fees

The BC NDP government is tightening rules on payday lending fees and fees for cashing BC Employment and Assistance cheques.

This move is an effort to assist the province’s “most financially vulnerable individuals” from unorthodox lenders and credit providers who charge high borrowing fees.

“Today, we’re making changes to better protect British Columbians who use payday loans, and cash social assistance and disability assistance cheques,” said Mike Farnworth, Minister of Public Safety and Solicitor General.

“We’re also looking to make further changes to protect vulnerable consumers, who use other high-cost financial services in the province.”

Some of the changes:

• The maximum fee will be lowered from $17 to $15 for every $100 borrowed, matching the lowest rate in Canada.
• A payday-loan borrower will have two full business days to cancel the loan without penalty.
• Payday lenders will be prohibited from requiring, requesting or accepting consent from a borrower, to use or disclose their personal information for anything other than for arranging or providing a payday loan.
• The fee for cashing a provincial social assistance or disability cheque will be capped at $2, plus 1% of the value of the cheque, up to a maximum fee of $10. This change applies to anyone in B.C. who cashes cheques.

These measures are a part of the provincial government’s overall Consumer Financial Protection Action Plan, and will take effect starting September 1st, 2018.