Ontario alone has over 50% of total
Canada payday loans in Canada. According to the 2007 directives issued by the
federal government, provincial or state governments have to take decision
regarding regulation of payday loan businesses. Such steps are needed for
effectively managing these businesses. If you are looking to take a short term
loan a good understanding of these regulations becomes quite essential.
The Need for Regulations
Increasing dissatisfaction among
borrowers for various lending companies is a prominent reason for issuing above
mentioned guidelines. The government's decision is a reflection of its will to
have a concrete and transparent system for the business. There are many
shortcomings in present system that can be corrected only with the right
approach and by making clear rules. With a commitment to make Canada payday
loans much transparent and easier, the government came up with the Payday Loans
Act, 2008. The act provides for better measures to protect all you consumers.
Some of the key provisions of the act are mentioned below. To understand the
rules clearly, these provisions shed some useful light.
Compulsory Licensing System
From now onwards brokers as well as
lenders would require license to carry out their short term loan business. At
the same time it is their responsibility to furnish all important information
online. Moreover, their license should be clearly seen at their store.
No Requirement for Wages Assignment
New regulations ban the practice of
requiring wages assignment. Now the lender is not allowed to ask you to furnish
such documents for obtaining a Canada payday loan.
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