Thank you, Mr. Speaker. My questions are for the Minister of MACA and are on the issue of a payday loan company with an office in Yellowknife and active in Ontario is facing a loss of its Ontario licence because of overcharging interest and fees. Despite exactly the same sorts of problems with payday loans here in Yellowknife, we hear no reports of action by our government to investigate, monitor and control what is happening here. The 16th Assembly passed law to require clarity in payday loan agreements for customers, but the best law is meaningless without enforcement. My question is: Does the department even review the forms and fee schedules of these companies?
Thank you, Mr. Bromley. The honourable Minister responsible for Municipal and Community Affairs, Mr. Robert McLeod.
Thank you, Mr. Speaker. The Member is right; the 16th Assembly did pass the Cost of Disclosure Act, and it basically gives consumers an idea of what the interest rate might be with the companies that are charging. It is a situation we faced on a couple of occasions in the Northwest Territories. Down south it’s a little more widely spread. They are protected under the Criminal Code, because they are not allowed to charge in excess of 60 percent.
We continue to monitor this. We work with our southern counterparts to monitor this. As of this moment, we think the Cost of Disclosure Act and educating those out there that want to borrow what they might be getting into, I think is a good first step.
Thanks for the Minister’s comments. I hope that the Minister will report to committee on the results of that monitoring.
People who rely on payday loan companies are often the most vulnerable in our society, as the Minister knows; people without bank accounts or fixed addresses. They then become trapped in a cycle of debt, paying their whole paycheques so they can borrow on the next, or borrowing to pay their loans. It’s not a coincidence that loans stores are located right nearby both of our liquor stores.
When the law was introduced, what steps did the department take to meet with firms to make sure that they are aware of the law and are meeting their legal responsibilities for transparency of fees and interest rates?
I would have to follow up on that, and with the department, to see if there was any communication with the firms. Once I get that information, I will share it with the Members across.
I appreciate the Minister’s commitment there. Reports I have from visits to these local offices say there are no prominent postings of information on legal limits to interest rates and fees. It’s all in the fine print when it comes to signing the contract.
Will the Minister ensure work with the firms to produce and publicize this information, and prominently post posters and pamphlets for display at loan offices?
I will commit to trying to get some information out there. The cost of the Credit Disclosure Act, I thought, was a good first step. If the firms are not making the consumers aware of what the potential interest rates are on these, then, to me, that would be a violation of the legislation that was passed by the 16th Assembly and we’d have to follow up on that.
Thank you, Mr. McLeod. Final supplementary, Mr. Bromley.
Thank you, Mr. Speaker. Thanks to the Minister again. The legal limit is 60 percent, and yet sometimes the loan companies have taken their customers to court to repay loans and the courts have actually found that the companies are charging way above the legal limit. MACA says people with complaints should go to the RCMP, but that’s relief from victimization, not prevention. Ontario revokes their licence while we turn a blind eye. My question is: When will this government recognize its responsibilities and set up a program of vigilance and enforcement?
Again, we would have to ensure that the firms are following the new piece of legislation that was passed by the 16th Assembly, and if there is a need to… Well, obviously there is a need in some cases to be a bit more vigilant. I will commit to Members on the other side that I will follow up with the department to see what we’re doing on our part to ensure firms are following the legislation that was passed, and that consumers are aware of the potential interest rates they may be charged.
Thank you, Mr. McLeod. The honourable Member for Frame Lake, Ms. Bisaro.
