Effective June 1, 2024, high-cost credit lenders must be licensed to operate in Newfoundland and Labrador.

High-cost credit lenders are distinct from banks, credit unions and payday lenders, and offer installment loans at high interest rates. The cost of borrowing may include additional fees and compounding interest. These financing arrangements may be used, for example, for lease-to-own home furnishings, renovations or vehicle purchases.

To better protect borrowers who take out high-cost loans, high-cost credit lenders will be required to comply with the Consumer Protection and Business Practices Act, along with the High-Cost Credit Product Regulations and High-Cost Credit Product Licensing Regulations.

The Regulations, published in the Newfoundland and Labrador Gazette, prescribe high-cost credit product rates, detail prohibitive practices and specify guidelines to enter into a credit agreement. The Regulations also establish licensing, notification and document retention requirements.

This new legislation makes Newfoundland and Labrador the first Atlantic Province to implement a regulatory regime specific to high-cost credit lenders.

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