Nova Scotia’s studied approach toward payday loans
July 31, 2008 | international, regulation | Comments (0)The Nova Scotia Utility and Review Board announced the caps it was placing on fees for payday loans there. After careful study and soliciting input from both sides of the issue, the board:
…set the maximum cost of borrowing at $31 on $100, including interest and fees. It also capped the default penalty at $40 and limited the interest rate on any outstanding balance to 60 per cent.
The review board also asked the provincial government to require companies to file yearly reports to track data on loans, including the number of defaults. So, safeguards for consumers were put into place, future studies and monitoring of the issue were commissioned, and lenders are able to continue operating their businesses at reasonable rates. Why can’t state legislatures in America copy this model?
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