The Office of the Attorney General has just released a consultation paper inviting the public to comment on proposed regulations for the Payday Loans Act. The Payday Loans Act received Royal Assent on May 15, 2009. However, it has not yet been proclaimed pending development of regulations required under the Act.

Proposed regulations under the new Act will:

• set the maximum allowable cost of borrowing for payday loans;

• require clear disclosure of the cost of borrowing and other terms of the loans;

• establish procedures for licensing payday lenders;

• set requirements for payday loans offices in the province; and

• prohibit unfair collection practices.

“The public is welcome to comment on all aspects of the draft regulations,” said Steven Dowling, Corporate Counsel for the Consumer, Corporate and Insurance Division of the Office of the Attorney General. “However, we are asking in particular for comments on the recommended maximum allowable cost of borrowing. In the other provinces, where maximums have been set, they range from $21 on each $100 borrowed to $31 on each $100 borrowed.”

Comments must be submitted in writing and be received by December 8, 2009.

The consultation paper is available on the P.E.I. Government Website at: www.gov.pe.ca/consumerservices. Copies can also be requested from the Consumer, Corporate and Insurance Services Division of the Office of the Attorney General at 4th Floor Shaw Building, 95 Rochford St, PO Box 2000, Charlottetown, PE, C1A 7N8 or by telephone at (902) 368-4580 or 1-800-658-1799.