New Legislation For Payday Loans Companies

The Canadian Federal Government introduced and has passed Bill C-26 which gives authority to provinces to regulate the payday loan industry. Each province is now able to introduce legislation to protect consumers and set a clear maximum on the cost of borrowing. Canadian provinces are enacting new laws pertaining to payday loan companies. The province of Manitoba was the first and others provinces will follow. Payday loan firms offer short term lending services for people who need money before they receive their paycheck's. Typically, these consumers have no source of available credit due to the fact they may be in the military, working at low wage jobs, or have bad credit ratings. They may be needing a short term loan for emergency financial situations, or simply want to purchase an item that has to be purchased right away. The major Canadian banks aren't in the business of serving these "low profit" consumers and thus many of them find they are subject to higher financing fees and or cannot get even the basic levels of credit. Banks have shifted their service emphasis away from consumers in the last decade. The consumer checking and savings accounts do not provide sufficient profit for them and they've turned to a focus on business and mortgage lending. Banks have consolidated and eliminated local branch locations in an effort to improve bottom line efficiency. The changed focus has resulted in huge growth in profits. Bank machine fees produced a record 154 million dollars in profit, and monthly business chequing fees are pulling in $4 to $35 per account per month. Royal Bank recorded a record 1.5 Billion dollar profit for the first quarter of 2007 and Scotiabank became a member of the Billion dollar club as well with just over $1.02 Billion. The Windsor Star recently reported that small businesses are paying out more than $723 per year on banking fees. Despite these high fees from banks who are enjoying the benefits of a Canadian Banking charter, the public and the government are very quiet on the matter. Strangely, new legislation has been drawn up and enacted against small payday loans firms. It is suggested that some of these companies are gouging low wage earning Canadians, similar to big Canadian banks. There are reports of some fly by night operators charging huge fees for these payday loan cash advance services. Now you can check samedaypaydayloansqii