Manitoba Provincial legislation to put a cap on interest rate loans takes
effect this fall. The province has approved the rate upheld by the federal
Criminal Code, to set maximum interest rates for short-term loans.
Manitoba’s Public Utilities Board has ruled that interest rates will be
capped at 17 per cent for loans under $500.
The limits on interest rates charged by payday loan companies will be
determined by the size of the loan.
It allows payday loan operators to charge a certain rate for certain sizes
A “payday” loan is anything up to $1,500 dollars on a short-term basis.
However, the Public Utilities Board has said you can charge up to 17 per
cent until you hit one-third of net pay of the loan ($500) then the interest
rate drops to 6 per cent off the total loan.
It was pointed out that 6 per cent on an annualized rate is still 144 per
cent interest that consumers must pay.
The interest rate on at 6 per cent on a two-week loan equals about 144 per
cent a year.
The goal was to strike a balance between protecting consumers and having the
short-term credit product available to consumers.
See http://www.PaydayLoanLegislation.com for more information.