What are the legal requirements for a payday loan business?
In Ontario, payday loan businesses must be licensed and comply with the Payday Loans Act, 2008. This law sets out rules for lenders, including maximum loan amounts, fees, and interest rate caps. The Act also requires lenders to provide borrowers with a cost disclosure statement, outlining their rights and responsibilities. Additionally, payday loan businesses must post a copy of the Act in their physical location, have a valid business license, and register with the Ministry of Government and Consumer Services.
What are the various laws, regulations, and compliance requirements I need to be aware of?
1. Interest Rate Caps: Payday lenders in Ontario must adhere to the maximum allowable interest rate of $15 per $100 loaned.
2. Repayment Terms: Loan terms should not exceed 62 days, and all loans must be repaid in full by the due date.
3. Fees: Payday lenders in Ontario are not allowed to charge additional fees, such as application fees, administration fees, or membership fees.
4. Loan Limits: Payday lenders in Ontario can only lend up to $1,500 per loan.
5. Disclosure: Payday lenders in Ontario must provide borrowers with a clear, written disclosure of all loan terms and costs before the loan is agreed upon.
6. Collection Practices: Payday lenders in Ontario must adhere to the Collection and Debt Repayment Practices Regulation and the Collection Agencies Act.
7. Licensing: Payday lenders in Ontario must be licensed with the Ministry of Public and Business Service Delivery (formerly the Ministry of Government and Consumer Services).
8. Advertising: Payday lenders in Ontario must adhere to the Consumer Protection Act when advertising their services.
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