Consumer Protection Act Amendments

Legislation introduced today, Nov. 7, will enable the province to enforce stricter guidelines and penalties on payday lenders and help protect their customers.

"The Consumer Protection Act regulates the terms and conditions for issuing consumer loans," said Jamie Muir, Minister of Service Nova Scotia and Municipal Relations. "It is important that the act be amended so it can effectively deal with the companies that make small, short-term loans, and provide greater protection to those people who need to borrow from them."

This legislation follows changes that the federal government made to section 347 of the Criminal Code. It offers an exemption to payday lenders operating in provinces or territories that have legislation to regulate payday lenders. The changes allow provinces to become more active in regulating payday lenders.

The changes were requested after an investigation of customer complaints revealed certain payday lenders were not complying with some provisions of the act.

The amendments to the Consumer Protection Act involve specific provisions for payday lenders which will:

• provide the borrower with full disclosure of all fees, charges and interest rates associated with the loan and their right to cancel
• provide the borrower a "cooling off" period that allows cancelling the loan at no cost
• allow the borrower a free loan if the lender charges fees more than the amounts cited in the disclosure agreement
• require prominent display of loan costs at payday loan outlets
• prohibit "rollover" loans.

The Utility and Review Board has been designated to determine the maximum interest and fees payday lenders can charge.