Payday Loans Act, 2005 Kormos, Peter — Bill 193 (38th Parliament, 1st Session)

Bill 193, 38-1

Ontario — Bills

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Bill 193, Payday Loans Act, 2005

Kormos, Peter

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[38] Bill 193 Original (PDF)

Bill 193 2005

An Act respecting

payday loans

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Interpretation and Application

Interpretation

(1) In this Act,

"Minister" means the Minister of Consumer and Business Services or such other member of the Executive Council to whom administration for this Act is assigned under the Executive Council Act ; ("ministre")

"officer" includes the chair and any vice-chair of the board of directors, the president and any vice-president, the secretary and assistant secretary, the treasurer and assistant treasurer and the general manager and assistant general manager

of the corporation or a partner or general manager and assistant general manager of a partnership, any other individual designated as an officer by by-law or resolution or any other individual who performs functions normally performed by an

individual occupying such office; ("dirigeant")

"payday lender" means a person who is licensed under this Act to make payday loans; ("prêteur sur salaire")

"payday loan" means a loan of $3,000 or less with a term of two months or less; ("prêt sur salaire")

"prescribed" means prescribed by the regulations made under this Act; ("prescrit")

"provincial offence" means an offence under

an Act of the Legislature or under a regulation made under the authority of

an Act of the Legislature; ("infraction provinciale")

"Tribunal" means such tribunal as is prescribed or established by the regulations made under this Act. ("Tribunal")

Same

(2) Without limiting the generality of the definition of "payday loan" in subsection (1), the making of payday loans may correspond, more or less, to the following description:

1. The lender requires the borrower to provide proof that he or she has an established source of income, such as wages or benefits.

2. The amount of the loan and the repayment date of the loan are connected, directly or indirectly, to the amount of the borrower's income and the next regularly recurring date on which the income will be received.

3. The lender requires the borrower to provide a guarantee of access to funds belonging to the borrower in an amount that covers the value of the loan plus any interest or other fees charged by the lender.

4. The guarantee referred to in paragraph 3 may be a cheque, whether present-dated or post-dated, or another guarantee, such as an authorization to debit a bank account belonging to the borrower.

5. The lender provides the borrower with cash in an amount that is equal to the amount of the loan.

6. On or near the borrower's next regularly recurring date for receiving income, payment of the loan comes due and the lender is entitled to access funds belonging to the borrower by exercising the guarantee referred to in paragraph 3 unless

the borrower arranges for payment of the loan in some other way.

Non-application

2. This Act does not apply in respect of,

(

a) financial products or services regulated under the Insurance Act , the Credit Unions and Caisses Populaires Act, 1994 , the Mortgage Brokers Act or the Loan and Trust Corporations Act ; or

(

b) prescribed professional services that are regulated under another Act.

Registrar

Registrar and deputies

3. The Minister shall appoint a Registrar for the purposes of this Act and may appoint Deputy Registrars, one of whom may act as Registrar during the Registrar's absence or inability to act.

General powers

4. The Registrar may,

(

a) conduct public education programs and provide information to the public on any aspect of payday loans and related subjects, such as credit generally; and

(

b) enter into agreements relating to any matter respecting co-operation on the regulation of payday lenders and payday loans with a person or entity of another jurisdiction who has responsibilities in that jurisdiction with respect to the

regulation of payday loans or consumer protection generally.

Duty to report

(1) The Registrar shall report annually to the Minister on his or her activities over the previous year with respect to the application of this Act and on the payday loan industry generally.

Contents of report

(2) Without limiting the generality of subsection (1), the Registrar's report shall include,

(

a) aggregate data on the cost of payday loans, borrower use of payday loans and payday loan default;

(

b) information on complaints made under this Act and the resolution of those complaints;

(

c) information on action taken under this Act against payday lenders;

(

d) recommendations of the Registrar, if any, for improvements to the regulation of payday loans and payday lenders; and

(

e) such other matters as the Registrar considers advisable or as the Minister may require.

Report to be tabled

(3) The Minister shall submit the report to the Lieutenant Governor in Council and shall table the report in the Legislative Assembly as soon as reasonably possible.

Prohibitions

Licence required

(1) No person shall offer or make payday loans or hold themself out as a payday lender unless the person is licensed under this Act.

Office required

(2) No person shall offer or make payday loans or hold themself out as a payday lender unless the person maintains at least one office in Ontario at which the public is invited to deal.

Licences

Application for licence

(1) A person may apply to the Registrar for the issuance or renewal of a licence.

Requirements

(2) A person who applies for the issuance or renewal of a licence shall,

(

a) pay the prescribed fee;

(

b) provide a street address and a mailing address for the office required under subsection 6 (2);

(

c) provide a declaration, in a form approved by the Registrar, that lists all of the person's convictions for relevant offences, within the meaning of subsection (3),

(

i) under a law of Canada for which a pardon under the Criminal Records Act (Canada) has not been issued or granted,

(ii) under a law of Ontario or of another province or territory of Canada, and

(iii) under a law of another jurisdiction for which a pardon has not been issued or granted;

(

d) provide a declaration described in clause (

c) for every officer of the applicant;

(

e) provide consent for the Registrar to collect information on any matter mentioned in clause (

c) in respect of the applicant and every officer of the applicant;

(

f) provide evidence satisfactory to the Registrar that the person possesses the prescribed minimum working capital;

(

g) disclose,

(

i) the name of each person that beneficially owns or controls 10 per cent or more of the equity shares issued and outstanding at the time of the application,

(ii) such information on its corporate structure and governance as is prescribed; and

(

h) provide such other things as may be prescribed.

Relevant offence

(3) For the purposes of subsection (2), a "relevant offence" is one in which fraud is an element of the offence.

Refusal of licence

(4) If an applicant does not meet the requirements set out in subsection (2), the Registrar shall refuse to grant or renew the licence.

Notice of refusal

(5) The Registrar shall give the applicant written notice of a refusal under subsection (3), setting out the reasons for the refusal.

No right to hearing

(6) An applicant is not entitled to a hearing in respect of the Registrar's refusal under this section.

Disentitlement

(1) An applicant that meets the requirements set out in subsection 7 (2) is entitled to the issuance or renewal of a licence unless, in the Registrar's opinion, one of the following applies and the

matter is relevant to the applicant's fitness to hold a licence:

1. The applicant or an interested person in respect of the applicant is carrying on activities,

i. that are in contravention of this Act or the regulations, or

ii. that will be in contravention of this Act or the regulations if the applicant is issued a licence or a licence is renewed.

2. The past conduct of the applicant or of an interested person in respect of the applicant affords reasonable grounds to believe that the applicant will not carry on business in accordance with the law and with integrity and honesty.

3. The applicant or an employee or agent of the applicant makes a false statement or provides a false statement in an application for the issuance or renewal of a licence.

4. The applicant cannot reasonably be expected to be financially responsible in the conduct of its business or to maintain the prescribed minimum working capital, having regard to the financial position of the applicant or the financial

position of an interested person.

5. The applicant has been convicted of an offence or is liable to pay a fine for a provincial offence that has not been paid.

6. Any of paragraphs 1 to 5 applies in respect of an officer of the applicant.

7. A ground exists that is prescribed as a ground that may disentitle an applicant to a licence under this section.

Additional information

(2) The Registrar may require an applicant or an officer of the applicant to provide, in the form and within the time period specified by the Registrar,

(

a) information specified by the Registrar that, in the Registrar's opinion, is relevant to determining whether the applicant is disentitled to a licence under subsection (1); and

(

b) verification, by affidavit or otherwise, of any information described in clause (a).

Interested persons

(3) For the purposes of subsection (1), a person is an interested person in respect of an applicant if, in the opinion of the Registrar,

(

a) the person has or may have a beneficial interest in the applicant's business;

(

b) the person exercises or may exercise control either directly or indirectly over the applicant; or

(

c) the person has provided or may have provided financing either directly or indirectly to the applicant's business.

Refusal to issue or renew licence

9. The Registrar may propose to refuse to issue or renew a licence if, in his or her opinion,

(

a) the applicant is not entitled to a licence under subsection 8 (1); or

(

b) the applicant fails to provide anything required by the Registrar under subsection 8 (2).

Suspension or revocation of licence

10. The Registrar may propose to suspend or revoke a licence,

(

a) for any reason that he or she could propose to refuse to issue or renew the licence under clause 9 (a);

(

b) if the licensee is in breach of a condition of his or her licence; or

(

c) if the licensee is in breach of a provision of this Act or the regulations.

Conditions

(1) A licence is subject to such conditions as are consented to by the applicant or licensee, applied by the Registrar under subsection (2), ordered by the Tribunal or prescribed.

Same

(2) On issuing or renewing a licence, or at any other time, the Registrar may propose to apply such conditions to the licence as he or she considers appropriate.

Right to hearing when licence refused, revoked, etc.

(1) An applicant or licensee is entitled to a hearing before the Tribunal if the Registrar proposes to,

(

a) refuse to issue or renew a licence under

section 9;

(

b) suspend or revoke a licence under

section 10; or

(

c) apply conditions to a licence under subsection 11 (2) to which the applicant or licensee has not consented.

Notice of Registrar's proposed action

(2) If the Registrar proposes to take any action described in clauses (1) (

a) to (c), he or she shall serve written notice on the applicant or licensee setting out the reasons for the proposed action and informing the person of the

right to a hearing before the Tribunal.

Affected person's response

(3) A person who is entitled to a hearing may request a hearing before the Tribunal within 15 days after service of a notice under s

Document details

Collection	Ontario — Bills
Citation	Bill 193, 38-1
Type	bill
Volume / chapter	p38 s1 bill 193 html
Language	en
Format	html
Source	PROVINCIAL
Identifier	8aa083a9b7bb7ba4663c88a17e50db664454b7f4

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