Payday Lenders Regulations

Link to law: https://www.novascotia.ca/just/regulations/regs/cppayday.htm

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Payday Lenders Regulations
made under Section 18U of the

Consumer Protection Act

R.S.N.S. 1989, c. 92

O.I.C. 2009-324 (July 17, 2009, effective August 1, 2009), N.S. Reg. 248/2009

as amended to O.I.C. 2015-96 (March 31, 2015, effective June 1, 2015), N.S. Reg. 84/2015

Citation

1     These regulations may be cited as the Payday Lenders Regulations.

Definitions for Act and regulations

2     (1)    In these regulations,

 

                (a)    “Act” means the Consumer Protection Act;

 

                (b)    “APR” means the annual percentage rate, which is the percent that the cost ofborrowing is to the amount borrowed expressed as an annual rate;

 

                (c)    “Board” means the Nova Scotia Utility and Review Board;

 

                (d)    “Canadian Payments Association” means the association established under theCanadian Payments Act (Canada);

 

                (e)    “cash card” means a card or other device, other than a credit card, that can beused to obtain cash or purchase goods or services issued by a payday lender toa borrower of a payday loan instead of advancing cash or transferring money tothe borrower;

 

                (f)    “repeat loan” means a payday loan granted to a borrower 24 hours or less afterthey repay a prior payday loan granted to them.                                             

Clause 2(1)(f) added: O.I.C. 2011-369, N.S. Reg. 288/2011.

 

       (2)    In Sections 18A to 18U of the Act and in these regulations, “security” includes realor personal property or an interest in real or personal property.

Application of Consumer Protection Act Regulations to payday lenders

3     The Consumer Protection Act Regulations apply to payday lenders, except for thefollowing provisions of those regulations:

 

                (a)    clause 3(1)(b), respecting the fee for a permit;

 

                (b)    subsections 6(1) to (5), respecting hearings for refusing, cancelling orsuspending [a] permit;

 

                (c)    Section 11, respecting disclosing the percentage rate for each period during aterm of credit;

 

                (d)    Sections 15 to 20, respecting variable rates and credit.

Application of regulations to agents of lenders

4     An agent of a lender who is responsible for dealing with borrowers and prospectiveborrowers on behalf of a payday lender must comply with all the provisions of the Act andthe regulations made under the Act that apply to payday lenders, except that an agent of alender is not required to hold a permit under Section 18E of the Act.

Information to accompany application for permit

5     (1)    An applicant for a permit as a payday lender must submit all of the following withtheir application for a permit:

 

                (a)    for each loan option offered by the payday lender, a completed sample loanagreement for a $300 loan for a 14-day term that shows that the cost ofborrowing and any charges do not exceed the maximums set by the Board andincludes contact information, including a telephone number, for the paydaylender and contact information for Service Nova Scotia as supplied by thedepartment, together with the following statement: “Payday loans are regulatedby government, for more information on the regulation of payday lenders or toregister a complaint, contact: (insert contact information as supplied).”;

Clause 5(1)(a) amended: O.I.C. 2011-369, N.S. Reg. 288/2011.

[Note: The reference to the Department of Service Nova Scotia and Municipal Relations has been updated inaccordance with Order in Council 2014-71 under the Public Service Act, R.S.N.S. 1989, c. 376, effective April1, 2014.]

 

                (b)    a form that a borrower may use to give written notice of cancellation of apayday loan to the lender;

 

                (c)    a form of the receipt the lender uses to acknowledge receipt of what was paidor returned by a borrower when cancelling a loan;

 

                (d)    except as provided in subsection (2), all of the following information, in FormA, on loans granted by the payday lender from the location specified in theirpermit for the 12-month period from July 1 to June 30 immediately before thedate of the permit renewal:

 

                         (i)     the number of loans granted,

 

                         (ii)    the average size of loans granted,

 

                         (iii)   the number of defaults on loans granted,

 

                         (iv)   the average size of loans defaulted,

 

                         (v)    the number of borrowers who have been granted more than 1 loan,

 

                         (vi)   the number of repeat loans granted,

 

                         (vii)  the total number of borrowers who have been granted repeat loans,

 

                         (viii) the number of borrowers who have been granted repeat loans, for thefollowing number of times:

 

                                  (A)   1 time,

                                  (B)   2 times,

                                  (C)   3 times,

                                  (D)   4 times,

                                  (E)   5 times,

                                  (F)    6 times,

                                  (G)   7 times,

                                  (H)   8 or more times.

Clause 5(1)(d) replaced: O.I.C. 2011-369, N.S. Reg. 288/2011.

Section 5 renumbered 5(1): O.I.C. 2011-369, N.S. Reg. 288/2011.

 

       (2)    For permit renewals from July 1, 2012, to June 30, 2013, Form B must be used andthe following information supplied:

 

                (a)    the information in subclauses (1)(d)(i) to (iv) for the entire 12-month periodfrom July 1, 2011, to June 30, 2012; and

 

                (b)    the additional information in subclauses (1)(d)(v) to (viii) for the 6-monthperiod from January 1, 2012, to June 30, 2012.

Subsection 5(2) added: O.I.C. 2011-369, N.S. Reg. 288/2011.

Permit fee

6     The annual fee for a permit and renewal of a permit as a payday lender is $3334.65.

Section 6 amended: O.I.C. 2015-96, N.S. Reg. 84/2015.

Changes to loan agreement

7     A payday lender must submit any changes to its loan agreement, and a completed sampleof the loan agreement as required by clause 5(1)(a), to the Registrar at least 21 days beforethe revised loan agreement is used.

Section 7 amended: O.I.C. 2012-115, N.S. Reg. 87/2012.

Signs displaying rates and fees for payday loans

8     (1)    The display of rates and fees for payday loans required by Sections 18O of the Actmust be in the form of a sign that is immediately visible to persons when entering thepayday lender’s place of business.

 

       (2)    Signs required by subsection (1) must be a minimum of 61 cm wide by 76 cm highand shall contain lettering in a colour clearly contrasting with the background.

 

       (3)    A sign displaying rates and fees must contain the following information only:

 

                (a)    the heading “Payday Loans are High-Cost Loans” in letters that are at least3 cm in height;

 

                (b)    immediately under the heading in clause (a), the subheading “Example: $300loan for 14 days” in letters that are at least 2.5 cm in height;

 

                (c)    immediately under the subheading in clause (b), the following lines of text inletters that are at least 2.5 cm in height:

 

                         (i)     “Principal Amount $300.00”,

 

                         (ii)    “Total Cost of Borrowing” followed by the total cost of borrowing indollars and cents for $300,

 

                         (iii)   “Total to Repay” followed by the sum of $300 and the total cost ofborrowing in dollars and cents for $300,

 

                         (iv)   “Annual Percentage Rate–APR” followed by the annual percentage ratefor $300.

 

       (4)    A payday lender that offers more than one loan option, resulting in differing totalcosts of borrowing or annual percentage rates for a $300, 14-day loan, must includethe total costs of borrowing, totals to repay and annual percentage rates for each loanoption offered by the payday lender in the manner described in clause (c) on any signdisplaying the rates and fees under this Section.

Payday lender must display rates and fees for Internet payday loans

8A  (1)    A payday lender that offers, arranges or provides Internet payday loans must displayon the payday lender’s website a notice that contains the information required bysubsections 8(3) and (4) displayed in a clear and understandable manner in a colourclearly contrasting with the background.

 

       (2)    The notice referred to in subsection (1) must be made visible to borrowers

 

                (a)    at or near the top of the introductory page of the website for borrowers in NovaScotia; and

 

                (b)    in a location on the website that comes before the payday loan application.  

Section 8A added: O.I.C. 2012-115, N.S. Reg. 87/2012.

Payday lender must display permit

8B   A payday lender must prominently display its permit at the location specified in its permitfrom which the payday lender offers, arranges or provides payday loans.

Section 8B added: O.I.C. 2012-115, N.S. Reg. 87/2012.

Payday lender of Internet payday loans must display permit information

8C  A payday lender that offers, arranges or provides Internet payday loans must prominentlydisplay all of the following permit information at or near the top of the introductory pageof the payday lender’s website for borrowers in Nova Scotia:

 

                (a)    the business name or style as specified in the permit;

 

                (b)    the permit number;

 

                (c)    the permit expiry date.

Section 8C added: O.I.C. 2012-115, N.S. Reg. 87/2012.

Disclosures to borrower

9     (1)    The information required by clauses 18I(a) to (j) of the Act and the followinginformation must be provided by the payday lender to a borrower in the loanagreement when a payday lender gives a borrower funds or access to funds under apayday loan:

 

                (a)    all of the following information for the payday lender and any agent of thelender representing the payday lender to the borrower:

 

                         (i)     name,

 

                         (ii)    business address,

 

                         (iii)   mailing address,

 

                         (iv)   telephone number,

 

                         (v)    fax number,

 

                         (vi)   e-mail address;

 

                (b)    the borrower’s name and address;

 

                (c)    the date that the advance is made or a cash card is provided;

 

                (d)    the amount of the advance;

 

                (e)    the term of the loan;

 

                (f)    the date on which repayment is due or, if repaid by installments, the dates onwhich payments are due;

 

                (g)    an itemization of all fees, charges, commissions, interest, penalties and anyother amount to be paid or that could be paid by the borrower;

 

                (h)    a statement of the borrower’s right to obtain a copy of the loan agreement fromthe lender at any time upon request;

 

                (i)     if a cash card is issued to a borrower, the terms and conditions of the cash card,including all of the following:

 

                         (i)     the amount of credit available on the cash card,

 

                         (ii)    any date the cash card expires,

 

                         (iii)   that charges by a third party may apply for using the cash card atlocations other than the payday lender.

 

       (2)    The copy of the loan agreement required by clause 18I(l) of the Act must be signedby both the borrower and the lender.

 

       (3)    A payday lender must provide a prospective borrower with the cost of borrowing,and may require only that the borrower give their name in return for the information.

Advertising

9A  (1)    A payday lender must include all of the following in its payday loan advertisements:

 

                (a)    the total cost of borrowing for a payday loan, expressed in dollars and cents per$100 for a 14-day loan;

 

                (b)    the statement “Payday Loans are High-Cost Loans”.

 

       (2)    The information required by clauses (1)(a) and (b) must be displayed at least asprominently as any other representation in an advertisement and in the same manneras other representations are made, whether visually or aurally or both.

Section 9A added: O.I.C. 2011-369, N.S. Reg. 288/2011.

Form for written notice of cancellation must be given to borrower

10   When a payday lender gives a borrower funds or access to funds under a payday loan, thepayday lender must give the borrower the form submitted under clause 5(1)(b) for theborrower to use to notify the lender in writing of cancellation of the loan.

Section 10 amended: O.I.C. 2012-115, N.S. Reg. 87/2012.

Balance remaining on cash cards

11   (1)    At the request of the borrower, the balance remaining on a cash card, even if expired,must be applied towards repaying the payday loan.

 

       (2)    When a payday loan has been repaid, a borrower is entitled to receive any amountremaining on the cash card from the payday lender, whether or not the cash card hasexpired.

Rules for when repayment by pre-authorized debit dishonoured

12   The rules of the Canadian Payments Association for rejected transactions apply when anattempt to obtain repayment by pre-authorized debit is dishonoured.

One form of repayment only

13   A payday lender must not require more than 1 form of repayment from a borrower.

Borrower must not be required to repay loan earlier than borrower’s payday

14   (1)    A payday lender must not set the due date for repaying a payday loan any earlier thanthe borrower’s next payday.

 

       (2)    In subsection (1), “the borrower’s next payday” means the next day that theborrower’s regular wages, compensation or other income, including employmentincome, income assistance, unemployment insurance or other income guarantee, ispaid to the borrower.

Receipts for repayment of loan

15   (1)    A receipt issued by a payday lender under Section 18M of the Act must be induplicate so there are copies for both the lender and the borrower.

 

       (2)    With the borrower’s consent, the borrower’s bank records satisfy the requirement fora payday lender to issue a receipt under Section 18M of the Act for any form ofrepayment of a payday loan other than repayment in cash.

Wage assignments not used to facilitate loans

16   A payday lender must not request or accept a wage assignment, or an assignment of anyother kind of income, to facilitate repaying a payday loan.

Future payments not to exceed total amount of loan

17   A payday lender must not require a borrower to provide pre-authorized debits or futurepayments of a similar nature for an amount greater than the amount necessary to repay thepayday loan on the due date.

Charges included in cost of borrowing

18   (1)    Any charges or fees that a payday lender requires a borrower to pay in relation to theadvance of a payday loan, except for penalties or charges relating to renewals orextensions, must be included in the cost of borrowing, including the following:

 

                (a)    interest;

 

                (b)    administration fees;

 

                (c)    commissions;

 

                (d)    cheque cashing fees on cheques used to repay a payday loan, even if the loan ispast due;

 

                (e)    fees related to pre-authorized debits used to repay a payday loan, even if theloan is past due;

 

                (f)    fees relating to issuing and loading a cash card, even if payable to a third party;

 

                (g)    cash card transaction fees charged at the payday lender’s place of business;

 

                (h)    agent of lender or broker fees.

 

       (2)    A payday lender must not charge for any default by a borrower of a payday loanexcept as permitted by an order of the Board under Section 18T of the Act anddisclosed to the borrower in the loan agreement.

Loan must not be contingent on other purchase

19   A payday lender must not make a payday loan contingent on purchasing any product orservice, including insurance.

When refund must be paid under subsection 18P(4) of Act

20   In subsection 18P(4) of the Act, “immediately upon demand by the borrower or by theRegistrar” means at the time that a request is made for a refund in person at the paydaylender’s place of business, or no later than the next business day if the request is madeother than in person.

Time period for borrower to cancel loan advanced using cash card

21   For a payday loan that is advanced by means of a cash card, the time before which aborrower may cancel a loan under subsection 18Q(1) of the Act is the end of the businessday immediately after the day when the cash card is capable of being used to obtain cash orpurchase goods or services.

Records retained by payday lender

22   (1)    In accordance with Sections 18M and 18S of the Act, copies of loan agreements andreceipts issued to borrowers for loan repayments and on cancellation of loans mustbe retained for a minimum of 3 years from the date the loan was advanced or thereceipt was issued.

 

       (2)    If a receipt is not issued to a borrower for repayment of a payday loan in accordancewith subsection 15(2), records of repayment must be retained by the payday lenderfor a minimum of 3 years from the date the payment was received.

 

       (3)    A payday lender’s record retention system must be capable of providing an inspectorwith the particulars of all loans advanced in any period during the previous 3 years,including all of the following:

 

                (a)    the name and address of each borrower;

 

                (b)    each charge and payment relative to each loan;

 

                (c)    whether the loan is paid-out or outstanding.

 

       (4)    The records referred to in this Section must be maintained or made available forinspection on demand at the location specified in the permit.

Subsection 22(4) added: O.I.C. 2012-115, N.S. Reg. 87/2012.

Remedies for contraventions of Section 18N of Act

23   (1)    If a payday lender charges a borrower a fee for repaying a payday loan before the duedate in contravention of clause 18N(g) of the Act, the borrower is entitled to a refundof any amount paid that exceeds the total amount borrowed.

 

       (2)    If a payday lender deducts or withholds a portion of the cost of borrowing from anadvance under a payday loan in contravention of clause 18N(d) of the Act, theborrower is not liable to pay the lender any amount that exceeds the advance less theportion deducted or withheld, and is entitled to a refund of any amount paid thatexceeds the advance less the portion deducted or withheld.

 

       (3)    If a payday lender grants a rollover of a payday loan in contravention of clause18N(h) of the Act, the borrower is entitled to a refund of any amount paid thatexceeds the total amount borrowed and, if the rollover is an advancement of a newpayday loan to pay out an existing payday loan, the borrower is not liable to pay thepayday lender any amount that exceeds the principal of the existing payday loan.

Form A

(for permit renewals on and after July 1, 2013)

Information Required for Each Payday Lender Location for the

12-month Period from July 1 to June 30

(pursuant to Section 5 of the Payday Loan Regulations)

Information about payday lender

Payday lender business name:                         ______________________________

Location civic address:                                    ______________________________

Location mailing address:                                ______________________________

Permit number:                                                ______________________________

Information about payday loans

All of the following information must be completed in accordance with Section 5 of the PaydayLoan Regulations:

1.

Number of loans granted

 

2.

Average size of loans granted

 

3.

Number of defaults on loans granted

 

4.

Average size of loans defaulted

 

5.

Number of borrowers who have been granted more than one loan

 

6.

Number of repeat loans granted

 

 

(Note: A repeat loan is defined as a payday loan granted to a borrower 24 hours or less after they repaya prior payday loan granted to them.)

7.

Total number of borrowers who have been granted repeat loans

 

8.

Number of borrowers who have been granted repeat loans, for the following number oftimes:

 

 

(A)       1 time

 

 

 

(B)        2 times

 

 

 

(C)        3 times

 

 

 

(D)       4 times

 

 

 

(E)        5 times

 

 

 

(F)        6 times

 

 

 

(G)       7 times

 

 

 

(H)       8 or more times

 

 

(Note: Do not include a borrower more than once in the totals here – include them only in the count forthe total number of times they have been granted repeat loans.

Form A added: O.I.C. 2011-369, N.S. Reg. 288/2011.

 ________________________________________________________________ 

Form B

(for permit renewals from July 1, 2012, to June 30, 2013, only)

Information Required for Each Payday Lender Location

(pursuant to Section 5 of the Payday Loan Regulations)

Information about payday lender

Payday lender business name:                         ______________________________

Location civic address:                                    ______________________________

Location mailing address:                                ______________________________

Permit number:                                                ______________________________

Information about payday loans

All of the following information must be completed in accordance with Section 5 of the PaydayLoan Regulations: