[41] Bill 156 Original (PDF)
Bill 156 2015
An Act to amend various Acts with respect to financial services
Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
Collection and Debt Settlement Services Act
1. (1) Subsection 1 (1) of the Collection and Debt Settlement Services Act is amended by adding the following definitions:
"administrative penalty" means an administrative penalty imposed under section 29.0.1; ("pénalité administrative")
"arrears" means a debt that is past due and that meets the criteria, if any, that are prescribed; ("en souffrance")
"assessor" means a person designated in writing by the Registrar as authorized to make an order under section 29.0.1 imposing an administrative penalty; ("évaluateur")
(2) The definition of "collection agency" in subsection 1 (1) of the Act is amended by striking out "or" at the end of clause (b), by adding "or" at the end of clause (c) and by adding the following clause:
(d) a person who purchases debts that are in arrears and collects them;
(3) The definitions of "Minister" and "Ministry" in subsection 1 (1) of the Act are repealed and the following substituted:
"Minister" means the Minister of Government and Consumer Services or whatever other member of the Executive Council to whom administration for this Act is assigned under the Executive Council Act; ("ministre")
"Ministry" means the ministry of the Minister; ("ministère")
(4) The definition of "registrant" in subsection 1 (1) of the Act is repealed and the following substituted:
"registrant" means a collection agency that is registered; ("personne inscrite")
2. (1) Clause 2 (1) (a) of the Act is amended by adding "subject to the regulations" at the beginning.
(2) Clause 2 (1) (e) of the Act is amended by striking out "a bank listed in Schedule I or II to the Bank Act (Canada)" and substituting "a bank or authorized foreign bank as defined in section 2 of the Bank Act (Canada)".
(3) Subsection 2 (1) of the Act is amended by striking out "or" at the end of clause (f) and by adding the following clauses:
(h) subject to the regulations, to a person who purchases debts through acquiring or merging with a business in a transaction that includes the transfer of accounts receivable;
(i) subject to the regulations, to a person who acquires debts through the seizure of accounts receivable under a security agreement;
(j) subject to the regulations, to a person who acquires a debt by taking an assignment of the contract that gave rise to the debt for the purposes of financing a transaction;
(k) subject to the regulations, to a person who purchases a financing agreement or group of financing agreements or the payments due under a finance agreement or group of financing agreements;
(l) subject to the regulations, to a person who purchases a debt that permits the person to collect the debt under the name of the original creditor; or
(m) subject to the regulations, to a person who enters into an agreement to finance the purchase of goods or services and who assigns the rights to payments under the agreement to a third party, even if the person continues to collect those payments on behalf of the third party.
3. Section 3 of the Act is amended by adding the following subsections:
Policies
(3) The Registrar may establish written policies regarding the interpretation, administration and enforcement of this Act.
Public record
(4) If the Registrar establishes written policies under subsection (3), the Registrar shall maintain a public record of them in accordance with the prescribed requirements.
4. (1) Subsection 4 (1) of the Act is amended by striking out "or act as a collector".
(2) Section 4 of the Act is amended by adding the following subsection:
Responsibility for collectors
(3) A collection agency that employs, appoints or authorizes an individual to act as a collector for or on behalf of the agency shall exercise due diligence to ensure that the individual complies with this Act and the regulations when acting as a collector.
5. (1) Clause 20 (1) (c) of the Act is repealed and the following substituted:
(c) any commencement or termination of the employment, appointment or authorization of a collector.
(2) Subsection 20 (2) of the Act is repealed.
(3) Subsection 20 (3) of the Act is amended by striking out "subsections (1) and (2)" and substituting "subsection (1)".
6. Clause 22 (a) of the Act is repealed and the following substituted:
(a) collect or attempt to collect, for a person for whom it acts, including if it acts on its own behalf, any money in addition to the amount owing by the debtor;
7. Subsection 24 (2) of the Act is repealed.
8. Section 26 of the Act is amended by adding the following subsection:
Collector's address
(1.1) The address of a collector shall be deemed to be the address of the collection agency that employs, appoints or authorizes the collector to act as a collector.
9. The Act is amended by adding the following sections:
Administrative Penalties
Order
29.0.1 (1) An assessor who is satisfied that a person has contravened or is contravening a prescribed provision of this Act or the regulations may, by order, impose an administrative penalty against the person in accordance with this section and the regulations made by the Minister.
Purpose
(2) The purpose of an administrative penalty is to promote compliance with the requirements established by this Act and the regulations.
Amount
(3) The amount of an administrative penalty shall reflect the purpose of the penalty and shall be the amount prescribed by the Minister, which prescribed amount shall not exceed $10,000.
Form of order
(4) An order made under subsection (1) imposing an administrative penalty against a person shall be in the form that the Registrar determines.
Service of order
(5) The order shall be served on the person against whom the administrative penalty is imposed in the manner that the Registrar determines.
Absolute liability
(6) An order made under subsection (1) imposing an administrative penalty against a person applies even if,
(a) the person took all reasonable steps to prevent the contravention on which the order is based; or
(b) at the time of the contravention, the person had an honest and reasonable belief in a mistaken set of facts that, if true, would have rendered the contravention innocent.
No effect on offences
(7) For greater certainty, nothing in subsection (6) affects the prosecution of an offence.
Other measures
(8) Subject to section 29.0.3, an administrative penalty may be imposed alone or in conjunction with the exercise of any measure against a person provided by this Act or the regulations, including the application of conditions to a registration by the Registrar, the suspension or revocation of a registration or the refusal to renew a registration.
Limitation
(9) An assessor shall not make an order under subsection (1) more than two years after the day the assessor became aware of the person's contravention on which the order is based.
No hearing required
(10) Subject to the regulations made by the Minister, an assessor is not required to hold a hearing or to afford a person an opportunity for a hearing before making an order under subsection (1) against the person.
Non-application of other Act
(11) The Statutory Powers Procedure Act does not apply to an order of an assessor made under subsection (1).
Appeal
29.0.2 (1) The person against whom an order made under subsection 29.0.1 (1) imposes an administrative penalty may appeal the order to the person prescribed by the Minister by delivering a written notice of appeal to the latter person within 15 days after receiving the order.
Extension of time for appeal
(2) The prescribed person mentioned in subsection (1) may extend the time period for appealing and may determine the circumstances in which extensions are given.
Form of notice
(3) The notice of appeal shall be in the form that the prescribed person mentioned in subsection (1) determines.
Filing of notice
(4) The person against whom the order imposing the administrative penalty is made shall file the notice of appeal in the manner that the prescribed person mentioned in subsection (1) determines.
Stay
(5) An appeal commenced in accordance with subsection (1) operates as a stay of the order until disposition of the appeal.
Opportunity for submissions
(6) Before disposing of an appeal, the prescribed person mentioned in subsection (1) shall give the person against whom the order imposing the administrative penalty is made a reasonable opportunity to make written submissions.
Powers on appeal
(7) On an appeal, the prescribed person mentioned in subsection (1) may confirm, revoke or vary the order within the limits, if any, established by the regulations made by the Minister.
Non-application of other Act
(8) The Statutory Powers Procedure Act does not apply to an appeal made under this section.
Effect of paying penalty
29.0.3 If a person against whom an order imposing an administrative penalty is made pays the penalty in accordance with the terms of the order or, if the order is varied on appeal, in accordance with the terms of the varied order, the person cannot be charged with an offence under this Act in respect of the same contravention on which the order is based and no other prescribed measure shall be taken against the person in respect of the same contravention on which the order is based.
Enforcement
29.0.4 (1) If a person against whom an order imposing an administrative penalty is made fails to pay the penalty in accordance with the terms of the order or, if the order is varied on appeal, in accordance with the terms of the varied order, the order may be filed with the Superior Court of Justice and enforced as if it were an order of the court.
Date of order
(2) For the purposes of section 129 of the Courts of Justice Act, the date on which the order is filed with the court shall be deemed to be the date of the order.
Debt due to Crown
(3) An administrative penalty that is not paid in accordance with the terms of the order imposing it or, if the order is varied on appeal, in accordance with the terms of the varied order is a debt due to the Crown and is enforceable as such.
10. (1) The Act is amended by adding the following heading immediately before section 29.1:
Fee Orders, Regulations and Transition
(2) Paragraph 2 of section 29.1 of the Act is repealed and the following substituted:
2. For processing a notice given under subsection 20 (1) with respect to a commencement or termination of the employment, appointment or authorization of a collector.
11. (1) The Act is amended by adding the following section:
Minister's regulations
29.2 The Minister may make regulations,
(a) governing any matter that this Act describes as being prescribed by the Minister or provided for in regulations made by the Minister;
(b) governing information that a collection agency or collector is required to provide in any notice that the agency or the collector is required to send to a debtor when attempting to collect payment of a debt from the debtor, where the information is in addition to the information that a regulation made under clause 30 (1) (l) requires to be included in the notice;
(c) specifying a different administrative penalty for a contravention of different prescribed provisions of this Act or the regulations, different portions of those prescribed provisions or different prescribed requirements in those prescribed provisions;
(d) providing that the prescribed amount of an administrative penalty mentioned in subsection 29.0.1 (3) shall be calculated on the basis specified in the regulation, including an amount reflecting the number of transactions involved in the contravention on which an order for the administrative penalty is based;
(e) governing the procedure for making an order under section 29.0.1 for an administrative penalty and the rights of the parties affected by the procedure, including the time at which the order is deemed to be served on the registrant against whom the order is made;
(f) governing the procedure for appealing an order made by an assessor under section 29.0.1 and the rights of the parties affected by the appeal, including the time at which the notice of appeal is deemed to be received.
(2) On the later of the day this section comes into force and the day section 1 of Schedule 5 to the Budget Measures Act, 2009 comes into force, section 29.2 of the Act, as set out in subsection (1), is repealed.
(3) On the later of the day this section comes into force and the day section 1 of Schedule 5 to the Budget Measures Act, 2009 comes into force, section 29.2 of the Act is amended by adding the following clause:
(0.a) governing any matter that this Act describes as being prescribed by the Minister or provided for in regulations made by the Minister;
(4) On the later of the day this section comes into force and the day section 1 of Schedule 5 to the Budget Measures Act, 2009 comes into force, clause 29.2 (a) of the Act is repealed and the following substituted:
(a) requiring, as a term and condition of registration, that a collection agency provide financial security in respect of acts or omissions of the collection agency;
(5) On the later of the day this section comes into force and the day section 1 of Schedule 5 to the Budget Measures Act, 2009 comes into force, section 29.2 of the Act is amended by adding the following clauses:
(h) governing information that a collection agency or collector is required to provide in any notice that the agency or the collector is required to send to a debtor when attempting to collect payment of a debt from the debtor, where the information is in addition to the information that a regulation made under clause 30 (1) (l) requires to be included in the notice;
(i) specifying a different administrative penalty for a contravention of different prescribed provisions of this Act or the regulations, different portions of those prescribed provisions or different prescribed requirements in those prescribed provisions;
(j) providing that the prescribed amount of an administrative penalty mentioned in subsection 29.0.1 (3) shall be calculated on the basis specified in the regulation, including an amount reflecting the number of transactions involved in the contravention on which an order for the administrative penalty is based;
(k) governing the procedure for making an order under section 29.0.1 for an administrative penalty and the rights of the parties affected by the procedure, including the time at which the order is deemed to be served on the registrant against whom the order is made;
(l) governing the procedure for appealing an order made by an assessor under section 29.0.1 and the rights of the parties affected by the appeal, including the time at which the notice of appeal is deemed to be received.
12. (1) Subsection 30 (1) of the Act is amended by adding the following clauses:
(b.1) specifying requirements that a person must meet, in addition to those set out in any of clauses 2 (1) (a) and (h) to (m), in order to be exempt from the application of this Act under those clauses;
(b.2) specifying provisions of this Act and the regulations, except for subsection 4 (1) of this Act, to which a person described in any of clauses 2 (1) (a) and (h) to (m) is subject in the circumstances specified in the regulations;
(2) Clause 30 (1) (c) of the Act is repealed and the following substituted:
(c) specifying anything that is described as prescribed, other than a matter or thing that this Act describes as being prescribed by the Minister;
(3) Subsection 30 (2) of the Act is amended by striking out "a bank listed in Schedule I or II to the Bank Act (Canada)" and substituting "a bank or authorized foreign bank as defined in section 2 of the Bank Act (Canada)".
Consumer Protection Act, 2002
13. The French version of the definition of "supplier" in section 1 of the Consumer Protection Act, 2002 is amended by striking out "en les offrant" and substituting "en les vendant".
14. The Act is amended by adding the following Part:
Part VII.1
AGREEMENTS FOR CASHING Government Cheques
Definitions
85.1 In this Part,
"bank" means a bank, authorized foreign bank or federal credit union as defined in section 2 of the Bank Act (Canada); ("banque")
"credit union" has the same meaning as in the Credit Union and Caisses Populaires Act, 1994; ("caisse", "caisse populaire")
"federal government" means the Government of Canada and any department, agency, board, commission, official or other body of the Government of Canada; ("gouvernement fédéral")
"government agency" means the Crown in right of Ontario, an agency of the Crown in right of Ontario, a municipal government, a prescribed municipal agency or any other prescribed entity; ("organisme gouvernemental")
"government cheque" means a cheque issued to a consumer by the Government of Ontario, a government agency or the federal government. ("chèque du gouvernement")
Application
85.2 (1) This Part applies to a consumer agreement under which a supplier, other than a credit union, cashes a government cheque for a consumer.
Non-application to banks
(2) For greater certainty, this Part does not apply to a consumer agreement under which a bank cashes a government cheque for a consumer.
Disclosure of information
85.3 A supplier under a consumer agreement to which this Part applies shall display the prescribed information in the prescribed manner and in accordance with the prescribed requirements.
Limit on fee for cashing government cheques
85.4 (1) A supplier under a consumer agreement to which this Part applies shall not charge the consumer a fee for cashing a government cheque if the fee exceeds the prescribed amount.
Amount of fee
(2) For the purposes of subsection (1), the prescribed amount of the fee for cashing a government cheque may be,
(a) a fixed amount;
(b) a percentage of the face value of the cheque or any other amount calculated on the basis of the face value of the cheque;
(c) an amount that results from the application of any combination of clauses (a) and (b); or
(d) any amount determined by any other prescribed means.
Statement when cashing cheques
85.5 A supplier under a consumer agreement to which this Part applies who cashes a government cheque for the consumer shall provide the consumer, in accordance with the prescribed requirements, with a statement setting out the prescribed information with respect to the cashing of the cheque.
15. Section 87 of the Act is amended by striking out "and" at the end of clause (b), by adding "and" at the end of clause (c) and by adding the following clause:
(d) such other leases that are prescribed.
16. Clause 116 (1) (b) of the Act is amended by adding the following subclause:
(vi.1) in respect of Part VII.1, Agreements for Cashing Government Cheques, section 85.3, subsection 85.4 (1) and section 85.5,
17. (1) Clause 123 (7.1) (a) of the Act, as enacted by section 8 of Schedule 1 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, is repealed and the following substituted:
(a) respecting any matters that are described in Part VI.1 as being prescribed or provided for in the regulations;
(2) Subsection 123 (8) of the Act is amended by adding the following clauses:
(0.a.1) governing the factors that a lender is required to take into account with respect to a borrower before entering into a credit agreement with the borrower;
(0.a.2) prohibiting lenders from entering into a credit agreement with a borrower if the amount of the credit to be extended or money to be lent under the agreement exceeds the prescribed amounts or the amounts calculated according to the prescribed manner;
(0.a.3) requiring a lender under a credit agreement to provide to the borrower in writing, before entering into the agreement, a copy of the lender's assessment of the factors prescribed under clause (0.a.1) with respect to the borrower, and requiring that such information be given in accordance with the prescribed requirements;
(0.a.4) specifying that if a lender under a credit agreement does not comply with a regulation made under clause (0.a.3), the borrower is not liable to pay the lender the cost of borrowing under the agreement;
(0.a.5) prohibiting a lender from initiating contact with a borrower for the purpose of offering to refinance a credit agreement;
. . . . .
(c.1) prescribing maximum amounts for charges that are not included in the cost of borrowing under a credit agreement, or a method of setting maximum amounts;
(3) Subsection 123 (9) of the Act is amended by striking out the portion before clause (a) and substituting the following:
Lieutenant Governor in Council regulations: Part VIII
(9) The Lieutenant Governor in Council may make regulations for the purposes of Part VIII,
. . . . .
(4) Subsection 123 (9) of the Act is amended by adding the following clauses:
(a.2) governing and requiring the use of tags or other markers attached to or displayed around a good that is to be leased and the use of statements included in a display relating to a good that is to be leased, and governing the content of such tags, markers, statements or displays and the manner and form in which they are used;
. . . . .
(b.3) governing penalties to which a lessee is subject for making late payments under a lease, including,
(i) prescribing a grace period during which a lessor is prohibited from exercising the rights and remedies that are specified in the regulation with respect to late payments under a lease despite anything that is specified in the lease,
(ii) restricting the rights of a lessor despite anything specified in a lease if a lessee makes a late payment under a lease, including prohibiting a lessor from seizing the leased goods or terminating the lease,
(iii) prescribing the maximum amounts of penalties that a lessor can require a lessee to pay to the lessor for making a late payment under a lease or a method of setting those amounts and prescribing the circumstances in which a lessor can require a lessee to pay those amounts and the circumstances in which a lessor is not entitled to require a lessee to pay those amounts, and
(iv) specifying whether or not a lessor may apply the amounts described in subclause (iii) to any security deposit that a lessee has paid to a lessor under a lease;
. . . . .
(e) governing the right of a lessor under a lease to terminate the lease, including,
(i) prescribing the circumstances in which a lessor is entitled to exercise the right of termination or is not entitled to exercise that right, and
(ii) prescribing the requirements that a lessor must fulfil to exercise the right of termination, including requiring a lessor to give notice to the lessee and governing the notice;
(f) governing obligations of lessors and lessees arising as the result of the termination of a lease;
(g) permitting a lessee under a lease that the lessor has terminated for default in payments required under the lease to re-instate the lease, subject to any regulation made under clause (i), provided that the specified conditions, if any, are met;
(h) permitting a lessee under a lease who has terminated the lease for any reason to re-instate the lease, subject to any regulation made under clause (i), provided that the specified conditions, if any, are met;
(i) governing obligations of lessors and lessees arising as the result of the re-instatement of a lease as described in clause (g) or (h).
Payday Loans Act, 2008
18. The Payday Loans Act, 2008 is amended by adding the following section:
Exception, deduction from advance permitted
31.1 (1) If a borrower enters into a third payday loan agreement within 62 days of having entered into a first payday loan agreement, the lender shall ensure that,
(a) the term of the agreement is at least 62 days; and
(b) the agreement provides that the borrower is required to repay the advance and to pay the cost of borrowing to the lender in the prescribed number of instalments and at the prescribed times.
Same
(2) Despite section 31, and subject to section 34, if a third payday loan agreement includes the provision described in clause (1) (b), a lender may receive and demand payment of a portion of the cost of borrowing from the borrower before the end of the term of the agreement.
Duty of loan broker
(3) No loan broker shall facilitate a contravention of subsection (1).
19. (1) Subsection 35 (1) of the Act is repealed and the following substituted:
No concurrent or replacement payday loan agreements
(1) The lender under a payday loan agreement shall not enter into a new payday loan agreement with the borrower before the following number of days have passed since the borrower has paid the full outstanding balance under the first agreement:
1. The prescribed number.
2. At least seven days if no number is prescribed.
(2) Subsection 35 (3) of the Act is repealed and the following substituted:
Same borrower, different lenders
(3) No loan broker shall facilitate the making of more than one payday loan agreement between the same borrower and different lenders unless the following number of days have passed since the borrower has paid the full outstanding balance under the first agreement:
1. The prescribed number.
2. At least seven days if no number is prescribed.
20. The Act is amended by adding the following section:
Inspection of non-licensees
47.1 (1) If the Registrar has reasonable grounds to believe that an activity for which a licence is required is occurring, the Registrar or a person designated in writing by the Registrar may conduct an inspection and may, as part of the inspection, enter and inspect at any reasonable time the business premises of a person or entity, other than any part of the premises used as a dwelling, for the purpose of determining whether the person or entity is carrying on the activity.
Application of section 47
(2) Subsections 47 (2) to (7) apply to the inspection described in subsection (1), reading references to a licensee as references to the person or entity whose business premises are subject to the inspection.
21. (1) Section 77 of the Act is amended by adding the following paragraph:
16.1 governing advertising or signage in any medium with respect to a payday loan or a payday loan agreement, including,
i. governing the content and the location of the advertising or signage,
ii. governing the maximum size of advertising or signage,
iii. prohibiting licensees from making advertising or signage that is described in the regulation;
(2) Paragraph 17 of section 77 of the Act is repealed and the following substituted:
17. governing the requirements that parties are required to satisfy in order to make a payday loan agreement, including requiring a lender to take into account the prescribed factors with respect to a borrower before making a payday loan agreement;
17.1 prohibiting a lender from entering into more than the prescribed number of payday loan agreements with the same borrower in a one year period;
17.2 prohibiting a loan broker from facilitating the making of more than the prescribed number of payday loan agreements between the same borrower and different lenders in a one year period;
17.3 governing a third payday loan agreement referred to in section 31.1, including,
i. specifying the means of determining the number of instalments in which the advance is to be repaid and in which the cost of borrowing is to be paid, and the times at which they are to be repaid or paid,
ii. specifying the means of determining the amount required for each instalment mentioned in subparagraph i, and
iii. governing the proportion of each instalment mentioned in subparagraph i that will constitute repayment of the advance rather than payment of the cost of borrowing;
(3) Paragraph 24 of section 77 of the Act is repealed.
(4) Paragraph 27 of section 77 of the Act is repealed and the following substituted:
27. governing information and statements that a licensee is required to provide to a borrower, including information and statements with respect to,
i. a payday loan or a payday loan agreement, or
ii. payday loan agreements that a borrower has entered into with a lender in the period of time specified in the regulation;
27.1 governing requests that a licensee may make to a borrower, including requests in respect of,
i. studies about the needs of borrowers with respect to payday loans or payday loan agreements, or
ii. financial planning for borrowers;
27.2 governing the form that the licensee is required to use for the information, statements and requests mentioned in paragraphs 27 and 27.1;
27.3 governing the manner in which the information and statements mentioned in paragraph 27 are provided to a borrower, and in which requests mentioned in paragraph 27.1 are made to a borrower, including the order in which they are provided or made and the timing of their provision;
(5) Section 77 of the Act is amended by adding the following paragraph:
33.1 prohibiting licensees from offering or providing prescribed goods or services, other than payday loans, to anyone;
Commencement and Short Title
Commencement
22. (1) Subject to subsections (2) and (3), this Act comes into force on the day it receives Royal Assent.
Same
(2) Subsections 1 (1), (2) and (4), sections 2 to 12, 14, 15 and 16, subsections 17 (2), (3) and (4), section 18 and subsections 21 (1), (2), (4) and (5) come into force on a day to be named by proclamation of the Lieutenant Governor.
Same
(3) Subsection 17 (1) comes into force on the day section 8 of Schedule 1 to the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 comes into force.
Short title
23. The short title of this Act is the Alternative Financial Services Statute Law Amendment Act, 2015.
EXPLANATORY NOTE
The Bill amends the Collection and Debt Settlement Services Act, the Consumer Protection Act, 2002 and the Payday Loans Act, 2008 and expands the regulation-making powers in each Act. Some significant amendments are the following:
Collection and Debt Settlement Services Act
The Bill amends the Act to permit administrative penalties to be imposed against a person who has contravened or is contravening a prescribed provision of the Act. The new sections establish rules respecting the making of an order imposing an administrative penalty, the appeal of such orders, the enforcement of such orders and related matters.
Consumer Protection Act, 2002
The Bill adds a new Part to the Act: Part VII.1 regarding agreements for cashing government cheques. The new Part provides for a limit on the fee that may be imposed for cashing a government cheque. A supplier who cashes a government cheque for a consumer must also provide the consumer with a statement setting out prescribed information with respect to the cashing of the cheque.
Payday Loans Act, 2008
The Bill amends the restrictions respecting concurrent or replacement payday loan agreements and respecting the making of more than one payday loan between the same borrower and different lenders. The Bill also permits the Registrar to conduct inspections if he or she has reasonable grounds to believe that a person or an entity is acting as a lender or loan broker while not licensed.