FINTECH BLOG

Consumer Protection Legislation is Catching up with Technology

It might not sound sexy but it’s exciting nonetheless….Recent amendments to the British Columbia Disclosure of the Cost of Consumer Credit Regulation have opened the doors to real time digital consumer loan products.

The Business Practices and Consumer Protection Act and the Regulation require credit grantors who extend credit in the ordinary course of carrying on their businesses to provide borrowers with disclosure statements setting out certain information regarding the cost of borrowing, including the total cost of credit and the annual percentage rate (APR).

Effective March 1, 2017, the Regulation was amended to permit credit grantors to deliver many of the various required disclosure statements by electronic means (provided the borrower consents in writing). Prior to these amendments, electronic delivery of disclosure statements was not permitted under the Act.

This was problematic for financial institutions wishing to use online lending platforms with instantaneous credit approval processes to loan money to consumers in British Columbia. This was a clear example where the law had not caught up to technology.

Whereas everything up until the cost of borrowing disclosure could happen in real time (e.g. the loan application, credit approval, etc.), the lending process would get stuck at the disclosure statement step, at which point the lender would have to mail or otherwise deliver a paper copy of the disclosure statement to the borrower before the loan funds could be advanced.

With this recent legislative change, credit grantors will be able to complete the loan process instantaneously and digitally. The change is exciting because it could potentially result in a greater variety of short term loan products being made available to consumers by financial institutions, thereby providing consumers with options beyond payday loans.

About the Authors

KELLY SAMUELS
Kelly Samuels, partner, brings a knowledge of business law to the rapidly growing fintech sector.
READ MORE

FRASER HARTLEY EKB Fintech Author

FRASER HARTLEY
Fraser Hartley, partner, is focused on financing + technology, and helping the businesses that bring the two together.
READ MORE

riley lelonde ekb fintech author

RILEY LALONDE
Riley Lalonde, associate, assists clients with a variety of business law matters while keeping an eye on developments in the fintech sector.
READ MORE

MORE FINTECH ARTICLES THAT MAY BE OF INTEREST TO YOU

GFIN’s Cross-Border Testing Pilot Offers a Way Forward for Regulators & Fintech Companies
The need for international fintech collaboration Explosive technological development within the financial services sector has left regulators struggling to keep pace with innovation. In many jurisdictions, financial regulators have sought to strike a balance between supporting fintech businesses and upholding their mandates of protecting consumers, regulating industry, and creating financial stability. Achieving that balance has proven a challenge. Regulators try to keep up with innovation in financial technology Some... READ MORE
Recent News in Fintech & Crypto: Ethoca Acquired, Law Firms Accepting Crypto Payments, & More
Toronto-based Ethoca to be acquired by Mastercard Mastercard has announced it will be acquiring Toronto-based fintech company Ethoca. Ethoca is a global provider of technology solutions which aids merchants and card issuers in identifying and dealing with fraud in digital commerce. Ethoca provides technology which identifies when a fraudulent transaction has occurred. When detected, information is sent to merchants which enables them to confirm the transaction, halt delivery or... READ MORE