Besides setting the maximum charges, how does the Payday Loans Regulation protect consumers?
A. Payday lenders must have posters showing the rates they charge, so that borrowers can easily compare rates with other payday lenders and with other types of lenders, such as banks. Payday lenders must use a payday loan agreement that sets out all of the charges, terms and conditions of the loan. Borrowers have the right to change their mind and cancel the loan by the end of the following day, without paying any charges. Practices which encourage deeper debt and dependence on payday loans are regulated. Payday lenders may not issue more than one loan to a borrower at the same time. They may not roll over one loan into another loan with new charges. Payday lenders may not issue a loan for more than 50% of the borrower’s paycheques or net income to be received during the term of the loan. If a borrower is taking their third loan in a two month period, repayment of the loan must be phased over two or three pay periods. Other unfair practices are prohibited, such as collecting a repaymen
