9,075
edits
Difference between revisions of "Interest and the Cost of Borrowing Money"
Jump to navigation
Jump to search
Interest and the Cost of Borrowing Money (view source)
Revision as of 12:20, 12 October 2018
, 12:20, 12 October 2018→Cost of borrowing disclosure legislation
Drew Jackson (talk | contribs) |
Drew Jackson (talk | contribs) |
||
| Line 35: | Line 35: | ||
The federal government has legislation on credit cost disclosure through its jurisdiction over interest, income tax, criminal law, and banking. | The federal government has legislation on credit cost disclosure through its jurisdiction over interest, income tax, criminal law, and banking. | ||
Through its jurisdiction over banks, the federal government has passed [http://canlii.ca/t/7xm3 | Through its jurisdiction over banks, the federal government has passed [http://canlii.ca/t/7xm3 Cost of Borrowing (Banks) Regulations] under the [http://canlii.ca/t/7vqm ''Bank Act''] that set out how banks must disclose the interest rate charged on consumer credit agreements, including loans, credit cards, and lines of credit. That rate must be stated as an '''annual percentage rate'''. For most consumer credit agreements, the bank must also disclose the cost of borrowing stated as an amount in dollars and cents at the time the credit agreement is made. | ||
Provincially, credit cost disclosure is governed under the [http://canlii.ca/t/84mr ''Business Practices and Consumer Protection Act''], Part 5. There are different disclosure requirements for fixed credit (such as loans, mortgages and sales financing agreements), open credit (such as lines of credit and credit cards), and some leases. Fixed and open credit agreements require disclosure of the annual interest rate and the circumstances under which interest will be compounded. Leases and fixed and open credit agreements, which are not credit cards, must disclose the annual percentage rate calculated in accordance with the regulations. | Provincially, credit cost disclosure is governed under the [http://canlii.ca/t/84mr ''Business Practices and Consumer Protection Act''], Part 5. There are different disclosure requirements for fixed credit (such as loans, mortgages and sales financing agreements), open credit (such as lines of credit and credit cards), and some leases. Fixed and open credit agreements require disclosure of the annual interest rate and the circumstances under which interest will be compounded. Leases and fixed and open credit agreements, which are not credit cards, must disclose the annual percentage rate calculated in accordance with the regulations. | ||