Section 3 of the Consumer Protection Amendment Act (Payday Loans), as it enacts sections 148-151, 155, 157-161 of the Manitoba Consumer Protection Act (CPA), will come into force on March 9, 2009. These sections impose requirements and restrictions on payday lenders and allow inspections of lender records. Under the new provisions, a borrower must be given a prescribed document when an initial advance is made (or a cash card is given which enables access to the initial advance). This document must (among other things) set out that the borrower may cancel the loan within 48 hours of receiving the initial advance. If the lender fails to include this information in the document, or fails to provide the document at all, the borrower may cancel the loan at anytime.
Should the borrower choose to cancel the loan, he or she must provide written notice to the lender and repay the outstanding balance of the initial advance, less any cost of credit that was paid by the borrower. The new sections of the CPA also set out a payday lender’s record-keeping requirements and grant inspectors significant inspection powers, including the ability to enter a lender’s premises without a warrant to inspect or audit records for accuracy and compliance with the CPA.
Sections 4, 5, and 8 of Manitoba Regulation 3/2009 (Regulation) came into effect on January 12, 2009. The Regulation amends the Payday Loans Regulation by requiring lenders to provide information about their privacy policies in the document required to be provided to borrowers (as discussed above) under s. 148 of the CPA. A lender must also provide a borrower with a copy of the completed and signed payday loan agreement. The Regulation further stipulates that sections 14, 15, 17–19 of the Payday Loans Regulation come into force on March 9, 2009. These sections set out (among other things) information that is required to be included in a payday loan agreement, when a notice of administrative penalty may issued, and form and content requirements for a lender’s records.