Cash Store and Instaloans Denied Payday Lender Licences
Ontario's Registrar of Payday Loans today issued a proposal to refuse recent applications for payday lender licences from Cash Store and Instaloans - both owned by The Cash Store Financial Services Inc.
Separately, on February 12, the Superior Court of Justice issued a decision that the basic line of credit Cash Store and Instaloans has been offering is a payday loan and subject to Ontario’s Payday Loans Act and Regulations. Cash Store and Instaloans are prohibited from acting as a loan broker of the basic line of credit without a licence and they have been ordered to pay $50,000 in costs to the Ontario Ministry of Consumer Services.
The Court’s decision resulted from an application filed on June 7, 2013 by the Ministry. As a result of the decisions by the Registrar and Superior Court of Justice, Cash Store and Instaloans cannot offer payday loans or their basic line of credit product in Ontario.
In February 2013, the Ontario Registrar of Payday Loans issued proposals to revoke Cash Store’s and Instaloans’ licences. In the same month, Cash Store and Instaloans indicated they would no longer offer payday loans in Ontario, but would offer lines of credit instead. In July 2013, the companies did not renew their payday lender licences.
Under the Payday Loans Act, the Registrar may propose to refuse a licence if the applicant’s past conduct “affords reasonable grounds for belief that the applicant will not carry on business in accordance with law and with integrity and honesty.”
Past conduct the Registrar alleges includes:
- The November 2013 convictions of Cash Store and Instaloans operating as unlicensed payday lenders
- Charging more than the Ontario maximum of $21 per $100 borrowed for a payday loan
- Not providing consumers with their payday loans immediately
Both Cash Store and Instaloans have the right to request a hearing before the Licence Appeal Tribunal to dispute the proposal.
- More than 750 payday loan storefronts are located in the province.
- Under the Payday Loans Act, a payday lender must provide a consumer with their loan immediately upon entering into the payday contract.