Government Seeks Feedback On Lowering The Criminal Rate Of Interest

The government of Canada is seeking feedback on proposed changes to lower the criminal rate of interest (currently set at 60%), with a focus on high-cost installment loans. The criminal interest rate provisions in the Criminal Code were first enacted in 1980 and, other than minor tweaks and the exclusion of certain payday loans in 2007, have remained relatively unchanged.

We have written many times about (thus far, unsuccessful) attempts to change the criminal interest rate, including the most recent bill introduced in the Canadian Senate.¹ In August 2022, the government of Canada initiated its consultation on Fighting Predatory Lending by Lowering the Criminal Rate of Interest. The government's intention is to lower the current 60% interest rate, an outcome which would have significant and wide-ranging impact on lenders. The consultation encourages feedback from various stakeholders about the impacts of lowering the criminal rate of interest in the Criminal Code.