ONTARIO REGULATION 351/13
made under the
PAYDAY LOANS ACT, 2008
Made: December 11, 2013
Filed: December 17, 2013
Published on e-Laws: December 17, 2013
Printed in The Ontario Gazette: January 4, 2014
Amending O. Reg. 98/09
1. The heading immediately before section 1 of Ontario Regulation 98/09 is revoked and the following substituted:
Definitions and Application of Act
2. The Regulation is amended by adding the following section immediately before the heading “Licences or Renewal of Licences”:
Application of Act
1.1 (1) In this section,
“consumer” means an individual acting for personal, family or household purposes and does not include a person who is acting for business purposes.
(2) Subject to subsection (4), a loan is prescribed for the purposes of subsection 2 (2) of the Act if it is a loan under which a lender, except an entity or individual described in subsection (3), extends credit to a borrower who is a consumer so that the borrower may take one or more advances for up to an aggregate amount of principal and to which at least one of the following criteria applies:
1. The borrower is not entitled to take an advance without obtaining authorization, approval or permission of any kind from the lender or any other person for taking the advance, whether or not there is a charge for obtaining the authorization, approval or permission.
2. The amount that the borrower is required to pay in any 30-day period under the loan, except for the last such period, includes one or more payments totalling at least 20 per cent of the principal amount outstanding at the time of the last advance.
(3) The following are the entities and individuals to which the exception mentioned in subsection (2) applies:
1. A corporation without share capital to which Part III of the Corporations Act, the Not-for-Profit Corporations Act, 2010, Part II of the Canada Corporations Act, the Canada Not-for-Profit Corporations Act or comparable legislation of another province or territory of Canada applies.
2. A registered charity within the meaning of the Income Tax Act (Canada).
3. An individual, partnership, trust or an unincorporated body or association that does not carry on his, her or its activities for the purpose of gain or profit.
4. A bank, authorized foreign bank or federal credit union within the meaning of section 2 of the Bank Act (Canada), a trust or loan corporation authorized under the Trust and Loan Companies Act (Canada), an association to which the Cooperative Credit Associations Act (Canada) applies, or an insurance company or fraternal benefit society incorporated or formed under the Insurance Companies Act (Canada).
5. A registrant under the Securities Act, the Commodity Futures Act or comparable legislation of another province or territory of Canada.
6. Credit unions to which the Credit Unions and Caisses Populaires Act, 1994 or comparable legislation of another province or territory of Canada applies.
7. Insurers licensed under the Insurance Act or comparable legislation of another province or territory of Canada.
(4) Subsection (2) does not apply to,
(a) a lease of real property;
(b) a loan that is secured against real property;
(c) a margin loan;
(d) a loan that meets the following conditions, if the lender does not have any other such loan outstanding with the borrower who is a consumer:
(i) there is only one advance,
(ii) the advance is for a fixed amount that is equal to the credit granted,
(iii) there is a fixed maturity date that is no earlier than six months after the making of the loan, and
(iv) the amount that the borrower is required to pay in any 30-day period under the loan, except for the last such period, does not include one or more payments totalling at least 20 per cent of the principal amount of the loan;
(e) an agreement under which a borrower who is a consumer,
(i) acquires goods or services by way of sale, lease or otherwise, where the goods or services are not an extension of credit or a loan of money, and
(ii) pays for the goods or services by instalments or lease payments, either directly to the provider of the goods or services or to a third party; or
(f) a loan that is secured against a borrower’s legal claim if,
(i) the security interest is registered,
(ii) the borrower has entered into a contingency fee agreement with a lawyer in respect of the claim,
(iii) a court action in respect of the claim was or will be commenced as a condition of the making of the loan, and
(iv) the amount of the claim is more than $25,000.
3. The Regulation is amended by adding the following section:
Modifications to Regulation
37.1 (1) In this section,
“prescribed loan” means a loan prescribed by subsection 1.1 (2).
(2) The provisions of this Regulation apply to a prescribed loan with the following modifications:
1. Every reference to a “payday loan” shall be read as a reference to a “prescribed loan”.
2. In subparagraph 1 ii of subsection 14 (3), “the amount “$21.00”” shall be read as “an effective annual rate of interest of 60 per cent”.
3. In subsection 15 (2),
i. the maximum allowable cost of borrowing required to be disclosed by paragraph 0.1 shall be the effective annual rate of interest of 60 per cent, instead of $21 per each $100 advanced, and
ii. the information referred to in paragraphs 3 to 6 is not required.
4. The table required to be included in the prescribed loan agreement by paragraph 1 of subsection 18 (1) shall read as follows:
Details of Prescribed Loan Agreement
Maximum Allowable Cost per $100 Borrowed
A = the effective annual rate of interest of 60 per cent, and
B = the borrower’s signature.
5. Paragraph 7 of subsection 18 (1) does not apply. Instead, if the lender delivers or provides access to all or part of an advance to the borrower by way of a device, the lender shall provide the information set out in paragraph 7 of subsection 18 (1) to the borrower at the time of the advance.
6. For the purposes of the statements that are required to be included in the prescribed loan agreement by paragraph 9 of subsection 18 (1) and that are set out in subsection 18 (2), the heading “ATTENTION” and the statement under it are not required.
7. Section 21 does not apply. Instead,
i. subject to subparagraph ii, the lender under a prescribed loan agreement is deemed to have delivered an advance to the borrower upon entering into the agreement only if the advance is immediately accessible by the borrower when the borrower requests it,
ii. the lender under a remote prescribed loan agreement is deemed to have delivered an advance to the borrower upon entering into the agreement if the lender makes the advance accessible to the borrower within one hour of the borrower’s request.
4. This Regulation comes into force 60 days after it is filed.