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O. Reg. 489/17: GENERAL
filed December 14, 2017 under Payday Loans Act, 2008, S.O. 2008, c. 9
Skip to contentontario regulation 489/17
made under the
Payday Loans Act, 2008
Made: November 22, 2017
Filed: December 14, 2017
Published on e-Laws: December 14, 2017
Printed in The Ontario Gazette: December 30, 2017
Amending O. Reg. 98/09
(GENERAL)
1. Ontario Regulation 98/09 is amended by adding the following section:
Exemption from Act
1.2 The Act does not apply to a credit union or caisse populaire to which the Credit Unions and Caisses Populaires Act, 1994 or comparable legislation of another province or territory of Canada applies.
2. Paragraphs 3, 4 and 6 of subsection 14 (3) of the Regulation are revoked and the following substituted:
3. A subheading in 54 point font with the words “Example: Your $500 loan for 14 days”.
4. The following in 54 point font:
i. the words “Amount Advanced $500.00”, and
ii. the words “Total Cost of Borrowing” followed by the total cost of borrowing per each $500 advanced under the agreement and also expressed as an annual percentage rate calculated in accordance with section 55 of Ontario Regulation 17/05 (General) made under the Consumer Protection Act, 2002.
. . . . .
6. The following in 54 point font: the words “Total You Repay” followed by the total of $500 plus the total cost of borrowing per each $500 advanced under the agreement.
3. (1) Paragraphs 2 and 3 of subsection 15 (2) of the Regulation are revoked and the following substituted:
2. The cost of borrowing described in paragraph 1 applied to $500 advanced for a term of 14 days, expressed as an annual percentage rate calculated in accordance with section 55 of Ontario Regulation 17/05 (General) made under the Consumer Protection Act, 2002.
3. The cost of borrowing under the agreement mentioned in paragraph 1, expressed as a total amount and also expressed as an annual percentage rate calculated in accordance with section 55 of Ontario Regulation 17/05 (General) made under the Consumer Protection Act, 2002.
(2) Section 15 of the Regulation is amended by adding the following subsection:
(3) For the purposes of paragraph 3 of subsection (2), the lender shall use the actual term of the loan and the actual loan amount to calculate the annual percentage rate.
4. The Regulation is amended by adding the following section:
Effect of borrower’s net pay
16.2 (1) In this section,
“borrower’s net pay” means the amount determined by the following formula:
(A × 12) ÷ B
where,
A = the borrower’s net income for the calendar month before entering into a payday loan agreement, excluding any amount that the borrower has received under a payday loan or any other type of loan or form of credit, and
B = the number of pay periods in a calendar year with respect to the income that the borrower regularly receives.
(2) Before entering into a payday loan agreement, the lender shall determine the borrower’s net pay.
(3) The lender shall not enter into a payday loan agreement if the advance is more than 50 per cent of the borrower’s net pay.
5. (1) Paragraph 1 of subsection 18 (1) of the Regulation is revoked and the following substituted:
1. The following statements and table which are in the language of the agreement, which are set out on the first page of the agreement and which, subject to subsection (1.1), do not include anything else:
Details of Payday Loan Agreement
Amount Borrowed |
C |
Term of the Agreement in Days |
D |
Total Cost of Borrowing |
E |
Maximum Allowable Cost per $100 Borrowed |
F |
Cost per $100 Borrowed |
G |
Equivalent Annual Percentage Rate |
H |
This loan is your third or subsequent one in 63 days and qualifies for an extended payment plan |
I |
Payment 1: Amount and Due Date |
J |
Payment 2: Amount and Due Date (if applicable) |
K |
Payment 3: Amount and Due Date (if applicable) |
L |
Default Interest Rate |
M |
Borrower’s Signature |
N |
where,
C = the advance,
D = the term of the agreement in days,
E = the cost of borrowing expressed as a total amount,
F = whichever of the following applies,
(a) $21 per $100 borrowed if the parties entered into the agreement before January 1, 2017,
(b) $18 per $100 borrowed if the parties entered into the agreement on or after January 1, 2017 and before January 1, 2018, or
(c) $15 per $100 borrowed if the parties entered into the agreement on or after January 1, 2018,
G = the actual cost of borrowing expressed as an amount per $100 advanced under the agreement,
H = the cost of borrowing expressed as an annual percentage rate calculated in accordance with section 55 of Ontario Regulation 17/05 (General) made under the Consumer Protection Act, 2002,
I = Yes or No, as applicable,
J = either,
(a) the total amount and due date of all payments that the borrower is required to make in connection with the agreement if the borrower has not entered into a third or subsequent payday loan agreement with the same lender in a 63-day period, or
(b) the amount and due date of the first repayment instalment calculated in accordance with section 25.1 if the borrower has entered into a third or subsequent payday loan agreement with the same lender in a 63-day period,
K = either,
(a) zero if the borrower has not entered into a third or subsequent payday loan agreement with the same lender in a 63-day period, or
(b) the amount and due date of the second repayment instalment calculated in accordance with section 25.1 if the borrower has entered into a third or subsequent payday loan agreement with the same lender in a 63-day period,
L = either,
(a) zero if the borrower has not entered into a third or subsequent payday loan agreement with the same lender in a 63-day period or if there is no third repayment instalment calculated in accordance with section 25.1, or
(b) the amount and due date of the third repayment instalment calculated in accordance with section 25.1 if applicable,
M = the interest rate that the lender will charge the borrower on defaulted loans, expressed as an annual percentage rate calculated in accordance with section 55 of Ontario Regulation 17/05 (General) made under the Consumer Protection Act, 2002, and
N = the borrower’s signature.
MAXIMUM Amount of loan
Based on the information you provided to us, your net pay is P. The maximum amount we can lend you is Q, which is 50 per cent of your net pay.
where,
P = the borrower’s net pay as defined in subsection 16.2 (1), and
Q = P ÷ 2.
Dates of previous loans
You previously entered into payday loans on R.
where,
R = dates of all previous payday loans that the borrower entered into with the lender in the 63-day period before entering into the current payday loan agreement or, if no such loans were entered into in that period, “N/A”.
(2) Section 18 of the Regulation is amended by adding the following subsection:
(1.1) If the borrower has entered into a third or subsequent payday loan agreement with the same lender in a 63-day period and is required to repay the amount owing under the agreement in more than three instalments under section 25.1, the table mentioned in paragraph 1 of subsection (1) shall include a row similar to the row for Payment 3 for each instalment after the third instalment.
(3) Subsection 18 (2) of the Regulation is amended by adding the following paragraphs after the fourth paragraph under the heading “YOUR CANCELLATION RIGHTS UNDER THE PAYDAY LOANS ACT, 2008”:
Notwithstanding any language in the payday loan agreement, you may make partial prepayments at any time and if you are in an extended payment plan the lender must adjust your future scheduled repayments so that your future repayments are spread equally over the remaining term of the extended payment plan, unless you request otherwise when making the prepayment.
You may terminate the extended payment plan at any time by paying the amount owing in full without any additional charge, fee or penalty.
(4) Subsection 18 (2) of the Regulation is amended by striking out “Ministry of Small Business and Consumer Services” in the second paragraph under the heading “REFUNDS UNDER THE PAYDAY LOANS ACT, 2008” and substituting “Ministry of Government and Consumer Services”.
6. The Regulation is amended by adding the following section:
Payday loan agreements with extended payment plans
25.1 (1) In this section,
“pay period” means, with respect to a payday loan agreement, the greater of,
(a) the period from the day on which the parties enter into the agreement until the day on which the borrower is next regularly due to receive income, and
(b) the period from a day on which the borrower regularly receives income until the next day on which the borrower regularly receives income.
(2) If a lender enters into a third or subsequent payday loan agreement with the same borrower in a 63-day period, the agreement is exempt from section 31 of the Act and the lender shall provide in the agreement that the borrower is required to repay the advance and the cost of borrowing in instalments that are spread equally over,
(a) at least three of the borrower’s pay periods, if the borrower regularly receives income on a semi-monthly, bi-weekly or more frequent basis; or
(b) at least two of the borrower’s pay periods, if the borrower regularly receives income on a less frequent basis than that described in clause (a).
(3) The instalments may be spread over more than the minimum number of the borrower’s pay periods set out in subsection (2) if the lender and the borrower agree to that.
(4) A lender shall not require the borrower to make any instalment payments under subsection (2) that exceed,
(a) 35 per cent of the sum of the advance and the cost of borrowing under the payday loan agreement, if the borrower is required to pay instalments under clause (2) (a); or
(b) 50 per cent of the sum of the advance and the cost of borrowing under the payday loan agreement, if the borrower is required to pay instalments under clause (2) (b).
(5) If, under section 34 of the Act, a borrower who enters into a payday loan agreement under subsection (2) of this section makes a partial prepayment of any part of the outstanding balance under the agreement, the lender shall,
(a) adjust all future scheduled instalment payments required under this section so that they cover the remaining outstanding balance and they are spread equally over the remaining term of the agreement, unless the borrower requests otherwise when making the prepayment; and
(b) deliver to the borrower an update in writing that sets out the following table:
UPDATED Details of Payday Loan Agreement
Amount Borrowed |
S |
Total Cost of Borrowing |
T |
Amount Prepaid |
U |
Date of Prepayment |
V |
Balance of Amount Due under the Agreement |
W |
Days Remaining in the Term of the Agreement |
X |
Payment 1: Amount and Due Date |
Y |
Payment 2: Amount and Due Date (if applicable) |
Z |
Payment 3: Amount and Due Date (if applicable) |
Z.1 |
Borrower’s Signature |
Z.2 |
where,
S = the advance under the agreement,
T = the cost of borrowing at the time the parties entered into the agreement, expressed as a total amount,
U = the amount prepaid,
V = the date that the prepayment was made,
W = the balance remaining of all payments that the borrower is required to make in connection with the agreement,
X = the days remaining in the term of the agreement,
Y = the amount and due date of the first remaining repayment instalment calculated in accordance with this section,
Z = the amount and due date of the second remaining repayment instalment calculated in accordance with this section, if applicable,
Z.1 = the amount and due date of the third remaining repayment instalment calculated in accordance with this section, if applicable, and
Z.2 = the borrower’s signature.
(6) If the borrower has entered into a third or subsequent payday loan agreement with the same lender in a 63-day period and is required to repay the amount owing under the agreement in more than three instalments under this section, the table mentioned in clause (5) (b) shall include a row similar to the row for Payment 3 for each instalment after the third instalment.
(7) If the term of the agreement that parties enter into under subsection (2) exceeds a total of 62 days, the lender shall ensure that the cost of borrowing in the agreement, when converted to an annual percentage rate, is less than the criminal rate as defined in subsection 347 (2) of the Criminal Code (Canada).
Commencement
7. This Regulation comes into force on the latest of,
(a) the day subsection 25 (3) of Schedule 2 to the Putting Consumers First Act (Consumer Protection Statute Law Amendment), 2017 comes into force;
(b) July 1, 2018; and
(c) the day this Regulation is filed.