December 2021 - Revising the Criminal Rate of Interest in Canada - Summary of Recommendations:

To help fight predatory lending, the Government of Canada will launch a consultation on lowering the criminal rate of interest in the Criminal Code of Canada applicable to, among other things, installment loans offered by payday lenders.1 The 2021 Liberal Party of Canada platform also identified the problem and made a commitment to: “... [...] Previous proposals to lower the criminal interest rate in Canada include no less than five attempts, aiming to improve consumer protection and to update this section of the Criminal Code.2 Significant changes to payday lending (or high-cost credit) have recently been made within various provinces and yet the harms and proliferation of predatory lending continues.3 Payday loan interest rates contin. [...] The Government of Canada defines the criminal rate of interest as 60% EAR and above, through section 347 of the Criminal Code, starting in 1980. [...] Remove the requirement of an actuarial certificate and approval of the attorney general to prosecute a criminal case of interest. [...] The 2007 decision to exempt payday lenders from adhering to the Criminal Code’s maximum interest rate, and the transfer of regulatory responsibility for payday and other high-cost lending to the Page 3 provinces, resulted in patchwork of inadequate regulation and enforcement across the country and enabled payday loan interest rates to soar, topping 600% in some jurisdictions.19 Recent reforms to p.