Question

1. Should Canadian limits adopt the American approach of capping the cost of borrowing on a fixed rather than percentage basis?
2. What is the rationale behind the American limit on the number of renewals?
3. How should the cap relate to the criminal rate of interest?
4. Why not ban payday loans completely?
5. How will jurisdictional variation in the regulation of payday loans affect the development of the industry?
6. If judges are no better than average at assessing the truthfulness of witnesses, what are the implications for the interpretation of contracts in which the parties’ testimony conflicts and there is no independence evidence?
7. How do you think judges, who, like all of us, have their own inherent (perhaps unconscious) biases can better assess testimony in the diverse society like Canada?
8. What steps might a business person take to reduce the likelihood of problem in interpreting contracts?
9. Should cash customer be charged the same price as credit card customers when credit card customer cost the retailer more?
10. Why should credit card companies get to collect fees both the customers and the retailer?
11. Who should bear the loss in the case of online credit card fraud: the customer, the retailor, or the credit card issuer

Answer 1

ANSWER:

1. The Canadian should limit the American approach of capping the cost of borrowing on a fixed rather than percentage basis because under the fixed ‘cost of borrowing’ the time factor is not considered , thus the effective rate of interest could raised to many a folds. Thus limiting the fixed interest will keeps control on the rate of interest.
2. The limits on the number of renewals under the American approach, so that a transaction gets closed as early as possible and people would not make it a habit of taking loan on continuous basis.
3. The cap on the Payday Loans should be relate to the criminal rate of interest because these interest rates are supposed to be highest and the risk of default is more under the Payday Loans to any other loan, so the Payday loan’s rate of interest would have to be highest of all.
4. Yes, the payday loans should be banned because of its being very risky and expensive for the borrower.
5. The jurisdictional variation will make the Payday loans an effective and affordable loan which the employees will enjoy and do not repent of having.