TORONTO – Ontario’s Registrar of Payday Loans says it wants to deny new licences to Cash Store Financial Services Inc. (TSX:CSF), saying its decision is based on past conduct by the Edmonton-based company.
Under the provincial PayDay Loans Act, the registrar can do this if there are reasonable grounds for belief that the applicant “will not carry on business in accordance with law and with integrity and honesty.”
In a statement Thursday, the registrar cited conduct that included convictions in November 2013 that Cash Store and Instaloans were operating as unlicensed payday lenders; that they charged consumers more than a legal maximum of $21 for every $100 payday loan and that the loans were not provided immediately to consumers.
The Cash Store says it wants a hearing before the province’s Licence Appeal Tribunal to dispute the proposal by the registrar.
Earlier this week, the Ontario Superior Court ruled that the basic lines of credit that Cash Store was offering as of this week were, in fact, payday loans and subject to provincial regulations.
The court also ordered the company to pay $50,000 in costs to the Ontario Ministry of Consumer Services.
The Cash Store said it no longer offers lines of credit in Ontario as of the court decision on Feb. 12. It had began offering the products in July after it didn’t renew its payday lender licences.
Cash Store Financial operates 510 branches across Canada and 27 in the United Kingdom.
Cash Store and Instaloans act primarily as lenders and brokers of short-term advances and other financial services to income earning consumers who may not be able to obtain them from traditional banks.
© The Canadian Press, 2014