BY SAMANTHA GALE
CMB MAGAZINE cmba-achc.ca winter 2016 | 13
loanregulations
MORTGAGE BROKERS HAVE OFTEN
vocalized their concerns over having to comply
with onerous licensing requirements, while
other related financial services industries get
off scot-free. e playing field will now be
levelled in one province, with respect to high
cost loan providers.
As of September 1, 2016, high cost loan
providers and brokers will now need to be
licensed in the province of Manitoba in order
to engage in high cost private lending, which
include lines of credit and e-loans. e licensing
regime will include record-keeping and
disclosure obligations, which resemble those
which mortgage brokers must comply with.
High cost loans include loans with an
annual interest rate exceeding 32 per cent, loans
under $5,000 with high cost credit fees, and
lines of credit with certain high cost payment
requirements.
Lenders must display in-store signage
that explains the various components of the
loan repayment, including interest and fee
costs. ey must also provide cost-of-credit
disclosure, which includes a 48-hour cooling-
off period within which a consumer can cancel
the agreement. Online disclosure requirements
in the legislation are exceptionally prescriptive
and even include a requirement that certain
key information be disclosed in a white
background with a purple border.
Manitoba Tourism, Culture, Heritage,
Sport and Consumer Protection Minister Ron
Lemieux explained in a press release "that in
addition to the requirement to be licensed, high
cost credit grantors will have to contribute to
the Manitoba Borrowers' Financial Literacy
Fund through their licensing fees. is fund
supports programs designed to educate and
improve the financial literacy of borrowers and
potential borrowers."
e new legislation will be administered by
the Manitoba Consumer Protection Office.
Manitoba levels the playing field with new licensing regime
High Cost Loans
