About the Industry

History

Following an international trend, the payday loan industry in Canada began in the mid-1990s in response to an unfulfilled consumer demand for small-sum, short-term credit. (Canadian banks, trusts, credit unions and other traditional financial institutions then, as now, do not fill this need.)  Salary advances, while once prevalent, became less available due to outsourcing of payroll processing and the use of direct deposit by employers.

Prior to the emergence of the payday loan industry, consumers had to turn to their friends and family to borrow small sums, or, if this personal network was unavailable or inappropriate, to alternative lenders with onerous lending conditions.

In early 2004, the Canadian Payday Loan Association (now called Canadian Consumer Finance Association) was formed to represent responsible financial service companies who offer the payday loan product, which was then unregulated. Members of the association recognized that it was important to create and adhere to industry standards of business practices to protect consumers and keep the industry viable, and to have a voice in the room with governments and regulators on how the industry develops.

The payday loan industry in Canada has grown rapidly to an estimated 1,400 retail outlets across the country, with  nearly two million Canadians a year make use of payday loans. Customers enjoy the high quality, confidential service that our member companies and their staff offer, the convenience of the store locations, and the extended hours of operation.

Legislation

In 2007, the Parliament of Canada passed an Act to Amend the Criminal Code (criminal interest) that took payday loans out of the Criminal Code, and turned over authority to regulate the industry to the provinces. For more information click here.