Assented to 2007-05-03
An Act to amend the Criminal Code (criminal interest rate)
This enactment amends the Criminal Code by exempting persons from the application of section 347 of that Act in respect of agreements for small, short-term loans. The exemption applies to persons who are licensed or otherwise authorized to enter into such agreements by designated provinces that have legislative measures that protect recipients of payday loans and that specify a limit on the total cost of those loans.
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Marginal note:Criminal interest rate
347. (1) Despite any other Act of Parliament, every one who enters into an agreement or arrangement to receive interest at a criminal rate, or receives a payment or partial payment of interest at a criminal rate, is
(a) guilty of an indictable offence and liable to imprisonment for a term not exceeding five years; or
(b) guilty of an offence punishable on summary conviction and liable to a fine not exceeding $25,000 or to imprisonment for a term not exceeding six months or to both.
2. The Act is amended by adding the following after section 347:
347.1 (1) The following definitions apply in subsection (2).
« intérêts »
“interest” has the same meaning as in subsection 347(2).
« prêt sur salaire »
“payday loan” means an advancement of money in exchange for a post-dated cheque, a pre-authorized debit or a future payment of a similar nature but not for any guarantee, suretyship, overdraft protection or security on property and not through a margin loan, pawnbroking, a line of credit or a credit card.
(2) Section 347 and section 2 of the Interest Act do not apply to a person, other than a financial institution within the meaning of paragraphs (a) to (d) of the definition “financial institution” in section 2 of the Bank Act, in respect of a payday loan agreement entered into by the person to receive interest, or in respect of interest received by that person under the agreement, if
(a) the amount of money advanced under the agreement is $1,500 or less and the term of the agreement is 62 days or less;
(b) the person is licensed or otherwise specifically authorized under the laws of a province to enter into the agreement; and
(c) the province is designated under subsection (3).
Marginal note:Designation of province
(3) The Governor in Council shall, by order and at the request of the lieutenant governor in council of a province, designate the province for the purposes of this section if the province has legislative measures that protect recipients of payday loans and that provide for limits on the total cost of borrowing under the agreements.
(4) The Governor in Council shall, by order, revoke the designation made under subsection (3) if requested to do so by the lieutenant governor in council of the province or if the legislative measures described in that subsection are no longer in force in that province.
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