Mixed Messages?

Both the Winnipeg Free Press and The Toronto Star are carrying a story today about Federal NDP MP Peggy Nash's proposed private members bill on payday loans. According to The Free Press, Ms. Nash is proposing a bill that "calls on Parliament to create a regulatory process, putting one law in place for how payday loan companies operate across the country."

In theory, a single national regulatory regime would make life easier on a lot of people. Lenders who operate in multiple provinces would lower their compliance costs by only having one set of rules to worry about and provinces could save on the public utility board hearings, licensing bodies and other costs associated with industry oversight.

The trouble is, a lot of money has already been spent to get the regulatory environment to where it is today. After as much as a decade of study by Industry Canada and the Consumer Measures Committee, the regulatory regime was built around a province-by-province solution. In May 2007, the federal government passed Bill C-26, empowering the provinces to regulate the payday loans industry. Since that time, British Columbia, Saskatchewan, Manitoba, Ontario, Nova Scotia and New Brunswick have all passed payday loan legislation. Manitoba has completed its rate setting process and the other provinces are in the midst of doing the same. Industry and consumer groups have spent a great deal of time and money working with each of these provinces to help draft effective legislation, regulations and rate caps.

We will have to wait to see the contents of Ms. Nash's bill, but at first glance, the timing seems a bit off. What is more interesting is that it also seems to contradict the NDP's previous position on payday loan legislation. The following are excerpts from the NDP press release regarding the introduction of Bill C-26:

"NDP Finance Critic Judy Wasylycia-Leis hails today’s introduction of a bill that will allow provincial governments to regulate payday loans as a major breakthrough."

"'We’ll be looking for quick passage of this bill to enable provinces like Manitoba to move ahead with their plans for effective consumer protection as soon as possible.'"

I have already commented on what appears to be political grandstanding on the part of the NDP in Ontario. Hopefully this is not more of the same at the federal level.