On June 15, 2015, Ontario's Ministry of Government and
Consumer Services (Ministry) issued a consultation paper, "Strengthening Consumer Financial
Protection," (consultation paper) which offers a
discussion of potential approaches to strengthening protection for
Ontario consumers of financial services perceived to be
The Ministry is seeking input from the public, community
agencies, businesses, and municipalities on consumer financial
services including installment loans, payday loans, cheque cashing,
money transfers, and in connection with debts in collection. This
bulletin discusses the proposals relating to consumer financial
services. For a discussion on the proposals relating to debt
collection, please refer to our June 2015
Blakes Bulletin: Expanding the Meaning of Debt Collector in
The proposals are informed by the work of a Payday Lending Panel
that met in 2014, the Ministry's research, and ongoing
discussions with stakeholders.
Comments relating to the consultation paper are due on August
14, 2015. Responses are being sought in two ways: (a) respondents
can complete an easy survey (see here), or (b) they can read the full
consultation paper and submit comments. The consultation may see a
large take-up due to the easy-to-complete survey. Interested
businesses should be aware of the opportunity to submit
Proposed consumer financial services reforms focus primarily
on the Payday Loans Act, however the consultation paper
also seeks input on the need for specific regulation of other
alternative consumer financial services. As well, the consultation
paper includes specific proposals for consideration on
Payday Loan Proposals
The discussion about payday loans addresses two issues: repeat
borrowing and the cost of borrowing. The consultation paper
includes a chart comparing the cost of payday loans across Canada
(see page 5) and also compares international approaches to payday
Some of the questions on which the Ministry is seeking comment
in the consultation paper and survey include:
Whether payday lenders should be
required to consider whether borrowers can afford to pay back a
Whether Ontario should restrict
borrowers from repeated borrowing (the number of loans in a row or
in a year)
Whether borrowers would benefit from
more information on payday loans, including: more information on
the cost, their rights, the average number of loans a borrower
takes per year, and the complaint process
Whether there are ways to more
effectively provide increased information on payday loans,
including: more posters in stores, more sidebar information online,
and/or additional information on the front of the contract
Money Transfer Service Proposals
The discussion about money transfer services focuses on
transparency, disclosure and education. Unlike Quebec, the
consultation paper does not suggest any intention of the Ministry
to license money services businesses, which are already subject to
the licensing requirements under the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act.
Related to money transfer services, the Ministry is seeking
responses on the following proposals:
Whether Ontario should require money
services businesses to provide specific information, including how
much money is sent to the recipient or information to assist
consumers in comparing rates of money transfer services
Whether Ontario should require money
services business to post a notice of remittance fees in a
conspicuous place in their business premises in clear, plain
language to further facilitate consumer knowledge, awareness and
Alternative Financial Services Proposals
The consultation paper identifies the following as alternative
financial services, offered outside of traditional financial
institutions: installment loans, payday loans, cheque cashing,
pawnbroking, and rent-to-own agreements.
The consultation paper asks which alternative financial
services should be specifically regulated in Ontario. The survey
does not include any proposals with respect to alternative
financial services, but instead asks respondents generally about
the risks and biggest problems when using these products.
As noted above, comments relating to the consultation paper are
due on August 14, 2015. A link to the survey can be found here.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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