Regulation - LGIC

Proposed Regulatory Amendments to the General Regulation (O. Reg. 98/09) of the Payday Loans Act, 2008

Regulation Number(s):
Reg. 98/09
Instrument Type:
Regulation - LGIC
Bill or Act:
Payday Loans Act, 2008
Summary of Decision:
Amendments were made to the General Regulation to increase the protections extended to borrowers under the Payday Loans Act, 2008. This was done, for example, by adding to the disclosure obligations of payday lenders and by adding to the prohibited practices of licensees. Also, an amendment was made to the provision dealing with the amounts prescribed as included in the cost of borrowing with respect to a payday loan agreement.
Further Information:
Proposal Number:
Posting Date:
June 7, 2011
Summary of Proposal:
In 2008, the government enacted legislation to protect users of payday loans. The General Regulation under the Payday Loans Act, 2008 (the Act) prescribes, amongst other matters, licensing requirements for all payday lenders and loan brokers, consumer protection features that include enhanced disclosure requirements and the maximum total cost of borrowing limit for payday loan agreements.

The Ministry of Consumer Services is proposing to amend the General Regulation to clarify what is included in the maximum total cost of borrowing limit so that borrowers pay no more than the maximum, which is $21 per each $100 advanced under a payday loan agreement. Under the proposal, borrowers could not be charged fees, either directly or indirectly, that increase the cost of borrowing for a payday loan over the legal limit.

The proposed regulatory amendment would also clarify that borrowers must receive access to the full amount of the advance under the payday loan agreement, without deduction, at the time of entering into a payday loan agreement.

The Ministry of Consumer Services seeks comments on the government's intent to proceed with regulatory amendments to address this issue. To view Ontario's Payday Loans Act, 2008, see link below. To view Ontario's General Regulation of the Payday Loans Act, 2008, see the link below.
Contact Address:
Ministry of Consumer Services
Consumer Policy and Liaison Branch
Consumer and Business Policy
777 Bay Street, 5th Floor
Toronto, ON M7A 2J3
Attention: Samantha Pinto, Senior Policy Advisor
Effective Date:
September 1, 2011