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Province lowering payday loan rates

The Provincial Government is bringing in changes that will lower the maximum allowable charge for payday loans.

At the start of 2017, the maximum allowable fee will drop from $23 to $17 for every $100 borrowed.

“We had close to 160,000 British Columbians use this service last year, so there is a significant demand on these services.” Minister of Public Safety Mike Morris said

“We don’t want to drive it underground by charging too high a fee, and if you charge too low a fee then of course a lot of service providers would cease to operate.”

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Morris says the rate of default on payday loans is quite high, so they worked to strike a balance on the fee. The review started as a result of a resolution from the Union of BC Municipalities.

The Minister says they are also moving forward with a further 30 day consultation period to examine other services that may need policy changes such as, “vehicle title loans, instalment loans, cheque cashing fees and things like that.”

Prior to 2009, payday loan lenders charged as much as $30 dollars per $100.

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