I was picturing the PayDay Loan industry also with Gerryh's statement above.
Canadians vote 82% against sharia law banks
- Thread starter dumpthemonarchy
- Start date
I was picturing the PayDay Loan industry also with Gerryh's statement above.
I think that was addressed when Pay Day Loan companies were taken to court as their fees exceeded the legal limits, contracts were not clear. From what I recall the max interest that can be legally charged in Canada is 60 % per annum.
Does any institution lend 10,000 over 10 years?
Now that's legalized loansharking!
even those "short term" loans have a cap. As a matter of fact, it was the the payday loan companies exorbitant interest rates that caused Canada to come up with regulations concerning consumer interest rates.
So? It's still a caveat. Would you go to a bank that in effect charged you 50%? Do you think that bank would last long when others effectively only charged say 10% or whatever?
I believe you are right.
If I was one of those people that the 10% lenders wouldn't touch? Quite possibly.
That's how credit card companies get away with charging the usurious interest rates that they do. It's what shopping around is all about. So you'd have to seriously consider whether it would be worth it. It's a caveat.
desperate people do desperate things...as we can see with the payday...it's screwing the already screwed.
I'm not entirely sure but I believe the maximum effective APR varies a bit by province. I think in BC it is 58% but that may have changed after all the hoopla with the payday loans.
Interest is a Federal area. 60 %
http://www.blg.com/en/newsandpublications/documents/Antle_Practical_Guide_to_section_347.pdf
Borden Ladner Gervais LLP is an Ontario Limited Liability Partnership
A PRACTICAL GUIDE TO SECTION 347 OF THE CRIMINAL
CODE - CRIMINAL RATES OF INTEREST
Stephen Antle
*
Reprinted by permission of the Canadian Business Law Journal. Copyright 1994
.
INTRODUCTION
Between the Criminal Code sections on extortion and break and enter is s. 347.
i
This section
makes it a criminal offence to enter into an agreement or arrangement to receive, or to receive,
payments for advancing credit exceeding 60% of the total value of the credit advanced.
Parliament enacted s. 347 to control loan-sharking. However, the courts have interpreted s. 347
so that commercial lawyers, who might assume the Criminal Code has little relevance to their
practices, overlook this section at their and their clients' peril. Failure to consider s. 347 in
structuring a loan transaction can result in criminal charges and significant civil consequences.
If the courts find a transaction provides for a rate of interest exceeding 60% the borrower may
have an unexpected defence to the lender's attempt to enforce their agreement. The courts
may deprive a lender of some or all of its anticipated return. The lender's principal may even be
at risk.
http://www.blg.com/en/newsandpublications/documents/Antle_Practical_Guide_to_section_347.pdf
Borden Ladner Gervais LLP is an Ontario Limited Liability Partnership
A PRACTICAL GUIDE TO SECTION 347 OF THE CRIMINAL
CODE - CRIMINAL RATES OF INTEREST
Stephen Antle
*
Reprinted by permission of the Canadian Business Law Journal. Copyright 1994
.
INTRODUCTION
Between the Criminal Code sections on extortion and break and enter is s. 347.
i
This section
makes it a criminal offence to enter into an agreement or arrangement to receive, or to receive,
payments for advancing credit exceeding 60% of the total value of the credit advanced.
Parliament enacted s. 347 to control loan-sharking. However, the courts have interpreted s. 347
so that commercial lawyers, who might assume the Criminal Code has little relevance to their
practices, overlook this section at their and their clients' peril. Failure to consider s. 347 in
structuring a loan transaction can result in criminal charges and significant civil consequences.
If the courts find a transaction provides for a rate of interest exceeding 60% the borrower may
have an unexpected defence to the lender's attempt to enforce their agreement. The courts
may deprive a lender of some or all of its anticipated return. The lender's principal may even be
at risk.
Student loans. But when I had one they were done through the bank and just guaranteed by the government. I think they do them differently now.
At least they don't break thumbs.
I think it's in line with department store credit cards, which I think are usually 28%. But even that might be changing because now all the department stores are combining up with Visa and Mastercard.
There has to be legislation governing fees outside of interest that an institution can charge as well. I'm sure to circumvent anything egregious that could be amended as well, just as the Interest Act was in response to the payday loan activity. (I don't know, I'm just speculating)
I recall that due to the SCoC including all fees, interest, charges. Even late fees/ penalties on bills can be seen to exceed the allowable rate. And yes it has occurred in Canada.
http://www.mcmillan.ca/Files/SupremeCourtRulesonCriminalInterestRates_0304.pdf
Don't know if they would at all.
My comment was simply regarding the small piece on your point that if their interest rates were not competetive they would fold which is true, but a lot of damage could be done before hand.
Around the 12th-13th century interest rate prohibition, failure to address and find a solution caused the Muslim world to lose out to Europeans that would form companies, lend monies etc. Laid the basics of property law and its recognition by Govts of private property, which was one of the main building blocks of Western Civilization.
One more reason why Islam fell behind
Prior to that turn Islam was leading the world in sciences and other areas.
Well, there ya go. So it makes you wonder, who is actually doing the people some good and who is doing good for business profits? It's tough to do good when you have to fight the almighty profit margin.
Make no mistake; these banks/groups will charge 0% interest, but as was pointed out, the special fees will add up to an amount that equals teh bank had you gone there.
There is no discount or 'better deal'