Alberta government proposes reckless loan restrictions that will push consumers to illegal lenders
HAMILTON, ON – The Canadian Payday Loan Association (CPLA) signalled alarm with the Alberta government’s decision through the introduction of Bill 15 to ignore the evidence and impose significant restrictions on regulated, licensed small-sum short-term lenders. Licensed lenders will be unable to offer credit on a viable basis under these new restrictions. This will force a significant number of stores to close, jobs will be lost and many Albertans will be denied access to credit.
“If you deny people access to credit from regulated licensed lenders, the demand doesn’t disappear – it moves to unlicensed markets,” said Tony Irwin, President, CPLA. “The government’s new rules will leave consumers with few options but to resort to borrowing from the online illegal offshore industry. This is exactly what we’ve seen in other jurisdictions that have implemented similar restrictions.”
Since 2010 Alberta has regulated and licensed every payday loan outlet in Alberta. CPLA member lenders provide an important credit option to consumers seeking small-sum short-term loans not provided by banks or credit unions.
Bill 15 will remove a majority of the licensed lenders from the province. Online illegal offshore lenders are only a click away and are ready to serve that need. These lenders charge higher fees, impose hidden charges, make unauthorized withdrawals from back accounts and sell borrowers personal information. “What Alberta is doing is not consumer protection. It hurts consumers,” added Irwin.
The CPLA urges the Alberta Government to reconsider Bill 15 and work with industry on modifications that will allow for a viable industry.