New payday loan rules will keep more money in the pockets of many patrons, setting limits on the amount companies can charge for cash advances.
The legislation states that payday loan vendors will be capped at a $23 charge on every $100 borrowed.
Cindy Stirling, who used a payday loan company last October, and paid back $330 for a $300 loan, said even with the changes, she likely won’t use the service again.
“No, I wouldn’t because I don’t want to go into debt,” said Stirling.
Five years ago a code of best business practices was created by the Canadian Pay Day Loan Association to help protect customers, said Stan Keyes, the group’s president. “Those companies that charged more than 23 dollars are going to have to tighten their belts,” he said.
Currently there are 24 companies in the CPLA and only a handful will have to change their practices in order to meet the new rule. Charges previously ranged between $19.50 and $26.
“If these kinds of companies weren’t available, people would seek their money out (by) going under the table, or in the pool hall, or take their big-screen TV to a pawn shop,” said Keyes.