Consultation: 2017-2020 Payday Lender Fee Changes

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This is an overview of our 2017-2020 fee review for your sector. If you want more detailed information about any of the content below, please read this comprehensive backgrounder about the fee review process.

Introduction

Consumer Protection BC is an independent, self-funded, not-for-profit organization. Government has tasked us with regulating and licensing your sector. We have legal authority to set your licensing and other fees and charges. In doing so, we are required by law to recover our costs, to consult with you and to provide at least ninety (90) days’ notice prior to changing or introducing new fees.

What is happening?

We are in the process of setting your licensing fees for 2017-2020. Following a review of our costs and forecasted revenues for the next three years, we are proposing to change your licensing fees. To sustain and improve the oversight of your sector and recover costs, we are consulting on the following proposed licensing fee increases and other fee changes for 2017 – 2020:

 Fee Type

 

Proposed Fees

 

Current
Fee

Nov. 1, 2017

Nov. 1, 2018

Nov. 1, 2019

Nov. 1, 2020

Principal location new *


$2815


$5100


$5202


$5306


$5412

Principal location renewal*


$2815


$5000


$5100


$5202


$5306

Branch location new *


$1409


$2100


$2142


$2185


$2229

Branch location renewal*


$1409


$2000


$2040


$2081


$2123

* For more information about changes to the structure of licence renewals, effective January 1, 2018, please read the information below.

For a full listing of all proposed fee changes for your sector, please review the draft Fee Schedule

Why are fees changing?

Your licensing fees pay for the direct costs of regulating your sector, such as licensing, compliance inspections, complaint handling and enforcement activities as well as indirect costs like IT, finance and accounting, office rent, etc. Every year these costs increase. In some cases, costs increases are consistent with inflation, in other cases increases are based on specific and unique factors related to a sector (for example, changes to the law that result in new regulatory requirements).

The payday lending sector has changed in recent years. Since 2015, there has been a decrease in the total number of payday licensees. To recover our costs, a significant increase in the fee to renew a 2017 licence is required. Beyond 2017, we are proposing a 2% increase each year in 2018 and 2019. This fee change is based on the assumption that the number of licensees in BC will stabilize going forward. If there are any major fluctuations in our costs to regulate your sector or our licensing revenues for your sector from 2017 to 2020, we may need to make additional fee adjustments. Under such scenario, we would consult with you prior to making any changes.

You will also notice a new structure for licence renewal fees, effective January 1, 2018. You will pay a lower fee if you renew your licence at least two (2) weeks before it expires. This means that you will pay less if you renew your licence at least two weeks before October 31, starting with 2018 licence renewals.

We will also no longer be charging late fees. If you don’t renew your licence by its expiry date (October 31), you will need to submit a new licence application, which costs more money.  

The purpose of these changes is to encourage you to renew your licence before its expiry date. This will create efficiencies when we process licence renewals and will benefit you as one of our licensed businesses.

How are fees determined?

Consumer Protection BC operates on a cost recovery basis. As such, costs to licence and regulate seven different industries and provide general consumer protection are primarily covered by the fees that are collected through licensing.

In setting these fees, we allocate costs to each licensed sector using a number of factors to determine the sector’s share of the overall costs for us to operate. The factors that determine a sector’s share of our costs are broken down by each functional area of our organization. Once these costs of are determined for each licensed sector, a fee schedule is developed so that project revenues from each sector closely match our costs to regulate each sector.

What do fees pay for?

Your licence fees pay for our regulatory and consumer protection activities. We are mandated to carry out this work under BC’s various consumer protection laws.

Give us your feedback

This consultation document provides information about the proposed fee schedule and provides an opportunity for you to give us feedback. To provide feedback on the proposed 2017-2020 fee changes and/or our fee review process, please take our survey:

survey home

All feedback must be provided no later than July 15.

What happens next?

After the consultation closes on July 15 and we have assessed your feedback, we will give you 90 days’ notice prior to any fee changes.

The information above is an overview of our 2017-2020 fee review for your sector. If you want more detailed information about any of the content above, please read this comprehensive backgrounder about the fee review process.