By The Canadian Press

B.C. to reduce maximum charge on payday loans, seek options to high cost lenders

Sep 21, 2016 | 9:02 AM

VANCOUVER — The British Columbia government is taking steps to cut the interest rates charged on so-called payday loans.

The maximum allowable charge for a payday loan in B.C. will drop from $23 to $17 for every $100 borrowed, starting Jan. 1, 2017.

The Ministry of Public Safety and Solicitor General says the changes mean B.C.’s borrowing rates for the high-cost, short-term loans will be the second-lowest in Canada.

Prior to 2009, charges for payday loans in B.C. were as high as $30 for every $100 borrowed.

The ministry says in a news release that regulators will also consult with credit counsellors, advocacy organizations, loan providers and others as the province seeks improved protection for consumers who rely on payday loans.

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The 30-day consultation will examine issues ranging from consumer education and information, to development of innovative lower-cost loans that could shift consumers away from more expensive options.

“I saw for myself the devastating effect these short term, high-interest payday loans have on our communities. This is a positive step towards improving the lives of families and working people,” says Maple Ridge councillor and former Maple Ridge food bank chairman, Tyler Shymkiw, in the news release.  

Central 1 Credit Union regional director Anna Hardy says she applauds any solutions that prevent borrowers from becoming trapped in a cycle of personal debt, and adds she looks forward to speaking with the province about the issue.

The Canadian Press