The Payday Loans Act of 2008 has just been passed in the province of Ontario.

What it means: More regulation of the payday loan industry in Ontario and better protection for consumers.

The Act requires:

1. That payday lenders be legally licensed


2. That Payday Loan Lenders include all charges borrowers are required to pay in the total cost of borrowing. This is good for borrowers so they are aware of all costs and no unknown fees will come about.


3. That Lenders allow borrowers to cancel payday loan agreements during a “cooling-off period”


4. That Payday Loan Companies contribute to a public education fund on payday lending.

What’s next: An advisory board is getting together to determine a cap on interest rates of payday loans. This set limit will be included as part of this law and all lenders will be required to comply with the new law.

Ontario is now the 6th Canadian Province to put in place legislative measures to regulate the payday loan industry.

VIA