Financially vulnerable British Columbians will have better protections going into effect on Sunday, May 1 with new legislation to regulate high-cost lenders.
“The implementation of this new framework strengthens consumer protection and improves financial education to help people make important decisions,” said Mike Farnworth, Secretary of Public Safety and Attorney General. “Those who use or are considering high-cost financial services will benefit from industry regulation and supervision.”
As part of the 2019 amendments to the Consumer Protection and Trade Practices Act, under the new framework, companies that offer high-cost credit products, such as installment loans and lines of credit with more than 32% interest, will require an annual license and a regulation by BC Consumer Protection.
This oversight will help ensure that businesses understand and comply with these new requirements, and that consumers are protected and able to make informed decisions when using high-cost alternative financial services.
The changes also establish new transparency requirements and protections for borrowers. The rules prohibit certain fees, establish requirements for credit agreements, and establish the borrower’s rights and remedies.
These improvements are part of the government’s 2018 Consumer Financial Protection Action Plan to strengthen consumer protection and improve affordability for the most financially vulnerable people in BC. Previous phases included enhanced financial protections for consumers using government payday loans and check cashing services.
A new Consumer Financial Education Fund, which will also go into effect on May 1, 2022, will improve consumer financial education and awareness across the province. The fund will be supported by the industry as part of its annual fees.
As the Province’s consumer protection authority, Consumer Protection BC will administer the new framework and the Consumer Financial Education Fund. You can find information about high cost credit products for consumers and the licensing process for businesses on the Consumer Protection BC website.
Consumer Financial Protection Action Plan:
Regulation of high-cost credit products to protect consumers:
Online money loan resources:
Information on BC consumer protection laws – Consumer Protection BC: