Consumers and governmental officials alike in Canada need to address the question as to whether cash advance and payday loan in Canada cash advances in maryland services need to be regulated by respective provinces. Moreover, if quick cash loan and fast payday loan providers are regulated in Canada, what the possible affect on the consumer would be. Provinces within Canada were granted the ability by the federal government in 2007 to regulate payday loan and cash advance providers in their respective provinces. According to Statistics Canada, there are approximately 1, 400 fast payday loan and cash advance providers in Canada. In Ontario alone there are approximately 700 quick payday loan storefront offering prospective borrowers in Ontario these short-term cash advance services.
In November 2006, Manitoba entrenched quick cash loan regulations, also called payday loans and cash advanced, into law. According to the Manitoba payday loan and Manitoba cash advance regulation, a quick cash loan provider can charge a maximum of 17% on loans up to $500. Additionally, Manitoba payday loan cash advance regulations also require that quick cash loan operations in the province also be licensed and bonded. This is in place to ensure that the fast payday loan providers operating in the province follow the regulations and to also ensure that they are credible. Once a instant payday loan has been processed the customer now has 48-hours to cancel their pay day loan, whereas before the borrower could not cancel.
Furthermore, after Manitoba enacted its payday loan legislation in 2006, Nova Scotia adopted their own set of payday loan regulations. In August 2008, the provincial government enacted Nova Scotia payday loan legislation. According to the legislation, physical quick cash loan locations must not charge a prospective payday loan cash advance borrower more than $31 per $100 borrowed. Furthermore, the faxless payday loan and faxless cash advance provider must also be transparent, whereby the payday loan operation will provide full disclosure to the Utility and Review Board.
Just by examining the payday loan cash advance regulations in both Manitoba and Nova Scotia, a trend begins to emerge. Although the crux of the quick cash loan legislation in these two provinces is the similar, the maximum amount of fees a fast payday loan provider can charge varies from province to province. Essentially, one can surmise from this, that there is no general consensus among provinces pertaining to the maximum amount an instant payday loan provider can charge on a short-term cash advance.
Undoubtedly, there needs to be payday loan legislation in Canada to ensure that the pay day loan operations that are unethical (these are the people that have given the payday loan industry a bad name) are not able to operate. However, to ban payday loans from operating in Canada or to cap the amount a payday loan provider can charge very low would force payday advance loan operations to close, which would be disastrous to the consumer.
The Canadian payday loan industry has watched a handful of States in the us prohibit cash advance and quick cash loan providers from operating within their jurisdiction. As we have seen in the us, if payday loans in Canada did not exist, potential borrowers would be in a dire state. For instance, in each state where payday loans have been prohibited in the us, foreclosures have risen, meaning that people had to leave their homes because they did not have enough money to pay their bills. A pay day loan could have gotten them the cash loan they needed to pay their bills. Moreover, there has been a dramatic increase in the amount of bounced cheques, which ironically cost the individual more in NSF fees from the bank then it would to receive a payday advance loan. Once the lender receives the borrower’s application for the quick cash loans no faxing and has verified the information provided, the decision regarding the loan approval is instant. The borrower can then hope to get the loan amount transferred to his account within 24 hours of the loan approval itself and hence, any urgent monetary requirement can be instantly met through these loans. The repayment for the loans is also equally convenient and a borrower only needs to place a post dated cheque with the lender at the time of loan approval, to ensure that the loan amount is repaid on time.
As the quick cash loans no faxing are usually short term loans, there is no need to place collateral against the loans and the lender also does not insist on a credit verification of the borrower, before the loan approval. Hence, this form of loans are ideal for every category of borrowers, starting form those with a bad credit history to the tenant who does not have a valuable asset to place as security against the loan. Also, the lender does not place any restriction on the manner of expenditure of the loan amount and hence, any individual requiring immediate cash flow for any kind of financial need, can easily apply for and get instant access to such loans.