Roughly 300 payday lenders in the province have until November 1 to become licensed to stay in business.
The licensing requirement with the Business Practices and Consumer Protection Authority is the cornerstone of regulatory changes aimed at improving consumer protection in the payday loan industry.
As part of the changes, payday lenders will have to pay a $1,500 annual licensing fee for their head offices and $750 per year for each additional location. Licensees will be required to undergo a criminal record check.
The province is also setting limits on what payday lenders can charge and basic requirements on how they do business. Currently, payday lenders can charge fees of up to 30% of the loan amount. After November 1, the maximum charges will be reduced to 23%.
Lenders will also:
be prohibited from issuing a loan for more than 50% of a borrower's pay cheque;
no longer be allowed to collect repayment of loans directly from the borrower's employer or get unrestricted access to a customer's bank account;
be prohibited from asking for repayment of the loan before the borrower's payday;
be restricted to providing one loan to a borrower at a time; and
be prohibited from rolling one loan into another with new charges attached.