January 10, 2025 09:57 pm (IST)

Make this your homepage

Canada / USA

Los Angeles wildfire toll climbs to 10, thousands of structures destroyed | 8 labourers still trapped in Assam's flooded mine even after 3 days of rescue ops | SC refuses to hear petitions seeking review of its same-sex marriage judgement, says there is 'no error' | 'They should wind up the alliance': Omar Abdullah on AAP-Congress fight over Delhi elections | Pune woman killed by her colleague in full public view for not paying back his money, no one intervenes | Los Angeles wildfire leaves 5 dead, forces 1 lakh including celebs to flee, Hollywood hills ablazed | PM Modi condoles death of six people in Tirupati stampede incident | Days after condemning Pak airstrikes, India in a first engages with Afghanistan's Taliban regime | 6 dead in stampede near Tirupati temple during token distribution to offer prayers | Prominent journalist-film producer Pritish Nandy dies of cardiac arrest at 73

Alberta brings tougher regulations against PayDay Loans

India Blooms News Service | | May 18, 2017, at 09:43 pm

## PaydayLoan #StephanieMclean #ServiceAlberta

Calgary May 18 (IBNS): Once a roaring business, payday loans stores- which offer a small, short-term unsecured loan -are now becoming a shadow of their bygone days, because of stricter provincial regulations on the one hand and significant fall in demand due to poor economy.

Under this practice, a relatively small amount of money is lent at a high rate of interest on the agreement that it will be repaid when the borrower receives their next wages.

This short-term unsecured loan is "regardless of whether repayment of loans is linked to a borrower's payday". It is also called cash advance.

The number of stores in Alberta has reduced to 195 from 220 at this time last year, as per report of Service Alberta.

Alberta regulations stipulate that no more than $15 can be charged for every $100 of borrowing with a minimum term of at least 42 days.

Through the newly imposed regulations Government of Alberta has been trying to regulate an industry as a part of nationwide crackdown, that gave nearly 4.5 million short term high interest loans totaling $2.2 billion across Canada in 2014 as reported by the media.

In the beginning of 2017, Ontario & British Columbia implemented lower borrowing rates and have been trying to explore alternative source of lending.

New Foundland and Labrador is on their way to introduce first regulatory act for the industry by the end of this year.

However compared to regulatory steps of other provinces, Alberta has taken a drastic step wherein coupled with the combined effect of lower rate of borrowings with longer time for repayment it has brought down annual percentage rate from 600 percent to 202 percent for weekly payments over the 42-day period.

Alberta's act has been designed to end predatory lending, thereby saving vulnerable borrowers from getting trapped into debt cycles.

Government of Alberta is currently emphasizing on the need for developing alternative and credible source of lending through the system of developing credit unions and different non-banking financial companies.

However this transition will take time, Stephanie McLean, minister of Service Alberta said that "Instead of popping a balloon, we're slowly letting the air out of it".

(Reporting by Chandan Som)

Photo:Facebook Payday Loan

Support Our Journalism

We cannot do without you.. your contribution supports unbiased journalism

IBNS is not driven by any ism- not wokeism, not racism, not skewed secularism, not hyper right-wing or left liberal ideals, nor by any hardline religious beliefs or hyper nationalism. We want to serve you good old objective news, as they are. We do not judge or preach. We let people decide for themselves. We only try to present factual and well-sourced news.