GI-2023-51-reg3: Criminal Interest Rate Regulations

Payday lenders are the most directly hit — if you're running a payday loan shop in a province like Nova Scotia, Manitoba, or Saskatchewan where you currently charge $17 per $100, you'll need to drop your rates to $14 per $100, and cap any NSF fees at $20. The government estimates this will cut payday lender profits by over $26 million in the first year, with a total industry profit loss of about $238.5 million over 10 years, and a one-time cost of roughly $3.9 million nationally to update IT systems, signage, and marketing materials. About 350 small payday lending businesses are expected to be affected, and some may be forced to close or consolidate as larger players gain market share. Pawnbrokers (mostly small businesses) get a carve-out that lets them continue lending under $1,000 secured by collateral at up to 48% APR, while commercial lenders making loans between $10,000 and $500,000 can also charge up to 48% APR, and those making loans above $500,000 face no criminal rate cap at all.