Payday Loans Act, 2007 DiNovo, Cheri — Bill 224 (38th Parliament, 2nd Session)

Bill 224, 38-2

Ontario — Bills

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Bill 224, Payday Loans Act, 2007

DiNovo, Cheri

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[38] Bill 224 Original (PDF)

Bill 224 2007

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 (4), setting out the reasons for the refusal.

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

Document details

Collection	Ontario — Bills
Citation	Bill 224, 38-2
Type	bill
Volume / chapter	p38 s2 bill 224 html
Language	en
Format	html
Source	PROVINCIAL
Identifier	d401f724f7f0591a96230f1af77debbd489c2e46

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