The Doer government has suffered a big setback in its attempt to regulate the payday loan industry in Manitoba.
A Manitoba Court of Appeal decision released today said payday lenders were unfairly treated by the province’s Public Utilities Board (PUB) when it set lending rates last spring for the payday companies. The PUB was acting on a move by the province to regulate the industry, which has been tarnished by high lending rates.
The court decision opens the door for The Cash Store Financial Services to argue the PUB
acted beyond its scope in setting rates. The April 4 decision by the PUB capped the maximum cost of credit at 17 per cent for loans up to $500; 15 per cent for $501 to $1,000; and six per cent for loans between $1,000 and $1,500.
Payday loan companies cried foul saying the lower rates would drive many of them out of business.