Difference between revisions of "Direct Sales, Future Performance, and Time Share Contracts (11:V)"

The ''Criminal Code'' prohibits loans that charge a criminal rate of interest (s 347), which is defined as an annual rate that '''exceeds 60 percent'''.

Loans offered by payday lenders, if calculated according to the ''Criminal Code'', may charge rates that exceed the amount permitted under the definition. In 2006, the federal government amended the ''Criminal Code'' to '''exempt''' payday loan agreements from the criminal interest rate provision. Payday loan agreements are defined and are exempted from s 347 provided that the following three conditions are met (s 347.1):

# The loan must be for $1500 or less and for 62 days or less;  

# The person must be licensed or specifically authorized under provincial/territorial law to enter into that payday loan agreement; and  

# The province must be designated by the Governor in Council (which will happen in the province has adequate measures to protect recipients of payday loans).