2016 was a momentous year for payday lending reform, both in our province and our city! Here’s a recap:

CALGARY
June 2016 – Calgary City Council votes by a margin of 13-1 to include payday lenders under the Business License Bylaw
•Payday lenders must now obtain business licenses and pay an annual licensing fee of $184.
•In addition, payday lenders must display large signs in-store with information on money management resources.

November 2015 – Calgary City Council passes a Land-Use Bylaw amendment by a vote of 13-1
•This amendment mandates a separation of 400 metres between payday lending businesses.
•The goal is to limit the proliferation and clustering of payday lenders in low-income areas.

ALBERTA
March 2016: In the Speech from the Throne, the Government of Alberta announces plans to introduce An Act to End Predatory Lending
•With the announcement, Service Alberta also releases the results of its 2015 Payday Loan Regulation Review, which included consultations and an online survey.
•More than 1,400 Albertans responded, 84% of whom noted that the cost of borrowing was too high.

May 2016 – Bill 15: An Act to End Predatory Lending is introduced and subsequently passed in the provincial legislature
•The new legislation reduces the cost of borrowing to $15 per $100 borrowed. Alberta now has the lowest rate in Canada.
•The Act also requires government to encourage financial institutions to develop affordable and fair alternatives.

August 2016: The first phase of reforms introduced by the Act, including a reduced cost of borrowing, come into effect
•Alberta now has the lowest cost of borrowing in Canada – $15 per $100 borrowed (reduced from $23 per $100).
•In addition, all fees must now be included in the cost of borrowing.
•Payday lenders are required to provide customers with electronic receipts and financial literacy resources.

August 2016: First Calgary Financial and Chinook Financial announce the mainstream launch of the Cash Crunch Loan.
•The Cash Crunch loan, a payday loan alternative, is now available at all branches.

November 2016: The second phase of changes under the provincial legislation comes into effect
•Payday lenders are now required to offer instalment plans with all loans, which further reduces interest rates.
•Borrowers must be allowed the option of repaying a loan over a term of 42-62 days, and over at least three pay period.
Read the Government of Alberta press release.

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