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Tuesday, April 23, 2019
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OC 321/2010 - The Payday Loans Regulations (Minister of Justice and Attorney General)

Title: The Payday Loans Regulations

Minister: Minister of Justice and Attorney General

Summary: Coming into force (see text), these regulations (RRS P-4.3 Reg 1) will:

  • define “total cost of borrowing” to be inclusive of all possible charges or fees “in connect with” a payday loan (section 2);
  • exempt federal financial institutions, credit unions, trust and loan corporations, insurance companies and the employees of each from the operation of The Payday Loans Act (section 3);
  • set the fee for licensing a payday lender at $2,000 per location in the province (section 4);
  • establish additional requirements for applicants for a licence (section 5), including;
  • evident that the lender is registered in Saskatchewan to carry on business;
  • a criminal record check for sole proprietors, all partners in a partnership, and every director and officer of a corporation;
  • define a change of ownership for the purpose of section 12 of the Act, that automatically cancels a payday lender’s licence if there is a change of ownership (section 6);
  • define a change in circumstances for the purpose of section 16 of the Act that requires a payday lender to notify the director of a change of circumstances (section 7);
  • establish the method for forfeiture of financial security, mirroring provisions in other provincial legislation and regulations (section 8);
  • provide that payday lenders remain subject to the requirements of The cost of Credit Disclosure Act, 2002 (section 9);
  • prescribe the content of a payday loan agreement (section 10);
  • require that a copy of the payday loan agreement be provided to the borrower immediately upon entering into the agreement, and prescribes the methods of providing it (section 11);
  • require contact information for Credit Counselling Canada to be disclosed along with the payday loan agreement (section 12);
  • establish the size, content and location of signs that must be posted on the premises (section 13);
  • establish the rate of 23% of the principal amount as the maximum total cost of borrowing (subsection 14(1));
  • allow payday lenders to charge 30% per annum on defaulted loans (clause 14(2)(a));
  • allow payday lenders to charge $50 for a dishonoured cheque or pre-authorized debit (clause 14(2)(b));
  • restrict the size of the payday loan to 50% of borrowers’ net pay during the term of the loan (section 15);
  • establish prohibited practices in addition to practices prohibited by the Act (section 16):
  • entering into a rollover loan;
  • having the payment due before the borrower’s payday;
  • obtain direct access to a borrower’s bank account, except for the purpose of a specific pre-authorized debit; and
  • mandate that payday lenders keep their business records for at least three years after the records were created, or the loan was repaid, cancelled or forgiven (section 17).
See: The Payday Loans Act, section 66

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