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.
A Superior Court of Justice decision Feb. 12 found that the “basic line of credit” that Cash Store and Instaloans have been offering is a payday loan, 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 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. When the licences came up for renewal last July, neither company renewed its payday lender licence.
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.”
“The payday loan question”
The Director v. The Cash Store, 2014 ONSC 980 (CanLII)
Alberta Securities Commission – Cease Trade Order
The Cash Store Financial Services Inc., Re, 2013 ABASC 237 (CanLII)