Payday loan companies in Alberta will no longer be allowed to charge interest of more than 23 cents on the dollar.
The new regulation is among a number of changes being enacted by the province to protect consumers from usury while keeping law-abiding payday loan outfits afloat.
Service Alberta Minister Heather Klimchuk says the province is also banning rollover loans and mandating that borrowers get a two-day window to back out of a deal without penalty.
The 23 per cent cap puts Alberta in the middle of the spectrum among provinces that have enacted payday loan limits.
Alberta’s opposition NDP and Liberals say the cap and other rules should have been stricter to prevent payday outfits from preying on the working poor by charging fees that amount to 800 per cent a year or more.
The Canadian Payday Loan Association, an umbrella group for the industry, says the rules strike a responsible balance, and adds that accusations that all companies prey on the poor are unfounded.