The federal government proposing to regulate payday loans by placing a cap on borrowing rates, according to the 2023 budget.
Released on March 28, Budget 2023 categorizes lenders who offer loans at “very high interest rates” as “predatory lenders.”
As first reported by Blacklock’s Reporter, the budget said these lenders “can take advantage” of low-income Canadians, newcomers, and seniors given their very high-interest loans.
The Criminal Code currently caps the legal interest rate at 60 percent effective annual interest. It is applicable to most lending products in Canada such as instalment loans, lines of credit, and auto loans.
The only exceptions in the provinces are payday loans of up to $1,500 for 62 days or less….