Manitoba Changing Direction on Payday Loan Legislation

For those of you following along with the payday loan legislation adventure that is unfolding in Manitoba, a recent Vancouver Sun article has a few quotes from Manitoba Finance Minister, Greg Selinger indicating the new direction that the province is heading in:

"When one company, The Cash Store, won the right to appeal the cap — which had been set by Manitoba Public Utilities Board after a thorough examination of the industry — Selinger refused to let the issue be stalled. He promptly made plans to plug the loophole. 'We’re going to legislate the cap,' he told me. 'We’re not going to let it be tied up in the courts for a couple of years. 'As policy-makers we can do things a quasi-judicial body like the Public Utilities Board can’t.'"

It will be interesting to see what rate the 'policy-makers' choose to go with. The Public Utilities Board is being called out by the courts for possibly overstepping its jurisdiction by setting a rate so low that it will drive the majority of lenders out of the market. The Manitoba government, presumably free to set whatever rate they want (subject of course to whatever court challenges may arise) have the opportunity to set a rate that differs from the PUB's competition stifling approach. Borrowers who enjoy the ability to choose will certainly be hoping that they take a new direction.

More on Manitoba Payday Loan Ruling

BACKGROUND: Manitoba Decision Being Contested, Payday Loan Legislation Could Be Delayed, Judge's Initial Comment on Payday Loan Appeal

Yesterday I posted the first bit of news on the Manitoba Court of Appeal's payday loan ruling. Today the media has served up a bit more information and some comments from the province. I have provided some links above to previous posts on this topic, but the long and the short of it is that The Cash Store Financial Services is challenging the Manitoba Public Utility Board's ruling on maximum allowable rates for payday loans in that province. After several months of deliberation, justice Alan MacInnis has agreed to grant an appeal and a temporary stay of the PUB ruling while the appeal is heard. Unfortunately, this will delay the implementation of payday loan regulations in Manitoba. On the positive side, it will reopen the possibility of a maximum allowable rate that will enable a viable and competitive market to exist (see: problems with the PUB payday loan decision). While the delay is unfortunate, a competitive industry is in the best interest of everyone and should have always been the desired outcome.

Judge Sides with Payday Loan Company in Manitioba

I have only found one small mention of this in the press so far, but the Manitoba Court of Appeal has sided with The Cash Store and agreed to hear an appeal of the Manitoba Public Utility Board ruling issued early last year.

Here is the brief mention on the CJOB website:

"The Manitoba Court of Appeal has declared payday lenders were unfairly treated by the Public Utilities Board, when it set lending rates. The decision means The Cash Store Financial Services could argue the PUB acted beyond its scope in setting rates.

A decision last year by the Public Utilities Board capped maximum costs of credit at various levels depending on the amount of the loan. It's capped at 17-percent for loans up to 5-hundred dollars.

Loan companies said the lower rates would drive some of them out of business. Justice Allan MacInnes agreed saying in a written decision, a full appeal of the PUB's ruling should be heard. A date has not been set."