The Manitoba Government says new laws intended to protect consumers from paying too much for loans is now in effect.
“High cost credit products, or ‘payday loan-like’ products, can be confusing for some consumers and lead people into a cycle of borrowing that’s hard to get out of,” Justice Minister Heather Stefanson said. “This new legislation ensures there is transparency in the process and helps consumers make more informed decisions.”
Any business that offers high-cost credit prodcuts have to do the following:
• be licensed with the Consumer Protection Office;
• provide potential borrowers with a detailed information disclosure document prior to an agreement being signed and give the borrower reasonable time to review the information;
• display clear signage explaining the related costs and fees in each location these high-cost credit products are offered; and
• allow borrowers to cancel their loans within 48 hours and repay their loans without penalty.
Licencing fees collected by the province will support the Manitoba Borrowers’ Financial Literacy Fund, which helps educate and improve the financial literacy of borrowers and potential borrowers.