Payday Loans Business Licence
A Payday Lender:
- Offers, arranges or provides a payday loan to a borrower in Alberta
- Operates from business premises or on the Internet
A Payday Loan means:
- any advancement of money with a principal of $1,500 or less and a term of 62 days or less made in exchange for a post-dated cheque, a pre-authorized debit or a future payment of a similar nature, but not for any guarantee, suretyship, overdraft protection or security on property and not through a margin loan, pawnbrokering, a line of credit or a credit card.
Note: Failure to provide complete information will delay processing of your application and may result in a refund of your fees and closure of your file.
To get a licence as a Payday Loan business you must provide the following:
- An Irrevocable Letter of Credit (pdf) or
- Cash (including payment by bank draft, money order, certified cheque - all of these are payable to the Government of Alberta), or
- A term deposit or other similar instrument in the name of the Government of Alberta, c/o Service Alberta, 3rd floor, 10155 - 102 Street, Edmonton, Alberta, T5J 4L4, in trust for (Name of licensee).
* Note: In accordance with the Security Agreement, the security provided will be held for two (2) years after the agreement expires or for two years and three months (27 months) from the date the business license expires or the business closes or longer in the event of a claim being received.
The amount of security depends on the number of business locations and if the business is an Internet lender. Please contact the licensing office to find out how much security you need to provide. When setting the security amount, the Director can consider the following: the department’s previous history with the business and its partners or directors, the business’s financial history, and criminal convictions.
Licences take effect the date they are issued. The department will send you a notice and the appropriate form(s) before your licence needs to be renewed. Licence holders must notify Service Alberta in writing if their business licence address changes.
- A copy of the business’ standard loan agreement
- A copy of the Cancellation Notice form
- A copy of the form used to acknowledge the receipt of the loan cancellation
- A copy of the form used to acknowledge receipt of payments made by the borrower
A copy of the sign required under Section 20. The sign shall consist of only the following information in the following order:
- The words “We charge ________”, representing total charges for a payday loan
- The words “For a $300 loan for 14 days: Total cost of borrowing = __________” (representing the total charges for a $300 loan for 14 days)
- The words “Annual Percentage Rate = _________” (representing the annual percentage rate charged by the payday lender for a $300 loan for 14 days)
- The words “This information meets the requirements of the Payday Loans Regulation under the Fair Trading Act”
- Payday Loans Business Licence number
A business must have a licence and must prominently display a copy of the licence in each location named to which the licence pertains. If a business operates on the Internet, a copy of the license must be displayed prominently at or near the top of the introductory page of the website for Alberta borrowers.
As per s. 17 (2)(b) of the Payday Loans Regulation, the maximum one-time fee that can be charged for a dishonoured cheque or dishonoured pre-authorized debit is $25. This fee is not considered part of the maximum cost of borrowing or the 2.5% per month maximum interest rate for a defaulted payday loan. Fees for dishonoured cheques or dishonoured pre-authorized debits can only be charged on the initial attempt to process a payment instrument and subsequent attempts where the borrower has expressly consented, in writing, electronically, or by recorded audio, to the processing of that payment instrument on that date.
Loan Agreement Requirements
Written loan agreements will be required. The agreements must conform with the requirements set out in the Cost of Credit Disclosure Regulation under the Fair Trading Act.
Receipt for Payment
Written receipts for payment will be required. The receipts must include the following information:
LegislationFair Trading Act
Copies of legislation can be obtained from the Queen’s Printer Bookstore at:
Park Plaza, 5 floor
To call a Government of Alberta office toll-free (in Alberta), dial 310-0000 and follow the instructions.
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