On January 29, the federal government of Ontario circulated its assessment paper on managing Alternative Financial Services (AFS) and high-cost credit, en en titled “High-Cost Credit in Ontario: Strengthening Protections for Ontario Consumers” (Consultation Paper).
What you should know
- Growing in appeal, AFS are high-cost monetary solutions provided outside of conventional finance institutions like banking institutions and credit unions. Typical AFS offerings consist of pay day loans, instalment loans, personal lines of credit, and car title loans.
- The Consultation Paper seeks input on developing a high-cost credit meaning, licensing high-cost credit providers, managing costs, costs and costs, and imposing disclosure, cooling-off duration and commercial collection agency demands, and others.
- The federal government is certainly not thinking about the regulation of high-cost credit given by banking institutions or credit unions, and loans that are payday carry on being managed underneath the pay day loans Act and its own laws.
- Currently, British Columbia, Alberta, Manitoba and QuГ©bec will be the only Canadian provinces with legislation respecting credit that is high-cost.
- The Consultation Paper requests the views of stakeholders on its proposals by March 31, 2021.