Ontario’s new payday loan regulations that cap charges at $21 per $100 borrowed is a gift to the payday loan industry, says NDP MPP Cheri DiNovo.

“These restrictions will only affect fringe payday lenders, and won’t change the unfair, usurious interest rates regularly charged by mainstream payday lenders to low-income Ontario workers,” said DiNovo.

“It’s no wonder the payday loan industry applauds the move and calls the new regulations ‘balanced’.”

The new rate pales in comparison to Manitoba’s cap of $17 per $100, which declines to $15 and then $6 as the size of the loan rises.

The McGuinty government’s regulations come despite earlier claims that they would go farther than Manitoba in terms of consumer protection: “I really am optimistic, as an honourable member, to do better than that,” former Minister Ted McMeekin said on June 9, 2008.

“This is a case of the interests of Liberal lobbyists trumping the real concerns of low-income Ontarians in an increasingly difficult time. For the Minister to promise one thing and then do another shows complete disrespect for public integrity and accountability,” said DiNovo.

In Spring 2008, DiNovo introduced Bill 54, legislation that would have capped the maximum annual percentage rate on a payday loan at 35 per cent.

“$21 per $100 can easily translate into a 500-plus per cent interest rate. Quebec put a quick end to criminal-like interest rates by putting in a 35 per cent cap, which could have happened here if the McGuinty Liberals had the will to do the right thing,” said DiNovo.