Nova Scotia Legislation

As a result of the federal government passing legislation allowing for payday loans to operate free of usury laws, it has been up to individual provinces to regulate them.

In June 11, 2009 Nova Scotia's regulations for payday loans came into effect, fulflling the requirements of the federal usury law's exemption for payday loans.  There have been two rounds of legislation, the first establishing these rules:

  • maximum interest of 31% of the principal
  • maximum loan amount of 50% of the borrower's expected paycheque
  • no rollovers
  • only one loan allowed at a time
  • loans may be cancelled without fee during a two day grace period
  • clear disclosure of all fees

The second round followed from two recommendations from the board (here and here) which the minister accepted.  The recommendations ultimately had the following effects:

  • reduced the maximum interest charged to 25%
  • allowed for the regulation of online payday loans
  • specifically including insurance costs as part of the interest charged

Enforcement of the legislation is carried out by the Nova Scotia Utility and Review Board.  This is accomplished through mandatory licensing of all lenders, coupled with annual inspections.