The payday
loan industry in British Columbia is highly competitive and
there is a high demand for short term loans. There are multiple
providers who service a wide range of clientele. Rate caps that
are too restrictive will damage competition and restrict choice
for consumers.
Kevin Isfeld, Spokesman, BCPLA
But BCPLA spokesman Kevin Isfeld cautioned the government
against
introducing rate caps that will restrict choices for consumers
and he called
for an independent study on rates.
"The payday loan industry in British Columbia is highly
competitive and
there is a high demand for short term loans. There are multiple
providers who
service a wide range of clientele. Rate caps that are too
restrictive will
damage competition and restrict choice for consumers," said Mr.
Isfeld.
"There can be no question that if the government sets rates that
are too
low, most operators will be forced out of business. A lot of
people who have
need for the service won't be able to get a payday loan," he
added.
The BCPLA is a strong supporter of consumer protection and
has accepted that
the government will be implementing rate caps. The association
hopes it will do so in a
manner that
balances consumer protection with a competitive lending
environment. To that end, the BCPLA
urged the government to undertake a comprehensive study of the
industry that
reviews the business practices, operational costs, expenses, and
risk profiles
of all industry participants in the province. The BCPLA says the
study must also include a
review of the overall economic circumstances that have
precipitated the rapid
growth of this important industry.
"This study will provide regulators with a clear picture of what
operators are currently charging and thus an accurate, timely
and
market-specific benchmark for rate-setting," said Mr. Isfeld.
"The BCPLA would
be more than happy to fund this study and have it conducted by
an independent
body."
The BCPLA represents
65
percent of the industry in B.C.
