XN000022-1980-05-23 — Page 3

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FRIDAY, MAY 23, 1980

+ IF THE EFFECTIVE RATE CHARGED EXCEEDS 48 PER CENT PER ANNUM, THE COURT MAY SIMILARLY INTERVENE EXCEPT WHERE IT IS SATISFIED THAT, IN ALL THE CIRCUMSTANCES, THAT RATE IS NOT UNREASONABLE OR UNFAIR.+

COMMENTING ON THE TRANSITIONAL PROVISIONS FOR EXISTING LOANS, THE SPOKESMAN SAID NOTHING IN THE BILL WOULD RENDER ANY AGREEMENT OR SECURITY VOID OR UNENFORCEABLE,

+BUT WHERE THE INTEREST RATE ON SUCH AN AGREEMENT EXCEEDS 60 PER CENT, IT WILL HAVE TO BE BROUGHT INTO LINE WITH THE REQUIREMENTS OF THE BILL, HE SAID.

+THESE TRANSITIONAL PROVISIONS ARE NECESSARY TO DISCOURAGE LOANSHARKS FROM ATTEMPTING TO SECURE THE BACKDATING OF AGREEMENTS.+

THERE WILL ALSO BE PROVISIONS TO PREVENT MONEY LENDERS FROM CHARGING COMPOUND INTEREST AND OTHER FORMS OF LOANSHARKING.

+AN AGREEMENT FOR THE LOAN OF MONEY BY A MONEY LENDER SHALL BE ILLEGAL IN SO FAR AS IT PROVIDES FOR THE PAYMENT OF COMPOUND INTEREST, OR FOR INCREASING THE RATE OF INTEREST, OR IF IT PROHIBITS THE REPAYMENT OF THE LOAN BY INSTALMENTS,+ THE SPOKESMAN SAID.

THE BILL ALSO REQUIRES THE MONEY LENDER TO SUPPLY THE BORROWER WITH A COPY OF A NOTE OR MEMORANDUM WITHIN SEVEN DAYS OF THE AGREEMENT BEING SIGNED, TOGETHER WITH A PRESCRIBED SUMMARY OF CERTAIN PROVISIONS OF PARTS 1 AND IV OF THE BILL.

THEREAFTER, THE MONEY LENDER WOULD BE OBLIGED, UPON REQUEST BY THE BORROWER, TO SUPPLY HIM WITH INFORMATION DISCLOSING THE UP-TO-DATE STATE OF THE LOAN, HE SAID.

THE SPOKESMAN POINTED OUT THAT THIS PROVISION WOULD ENABLE THE BORROWER TO PROVIDE A RECORD IN THE EVENT OF COURT PROCEEDINGS,

A SURETY WOULD ALSO BE ENTITLED TO A COPY OF THE AGREEMENT OR SECURITY INSTRUMENT, AND UP-TO-DATE INFORMATION DURING THE CONTINUANCE OF THE AGREEMENT.

THE BILL ALSO PROVIDES FOR EARLY REPAYMENT BY THE BORROWER WITHOUT HAVING TO PAY THE LENDER ANY PENALTY OR PREMIUM. HOWEVER, THIS PROVISION WOULD NOT APPLY TO LOANS MADE BY A MONEY LENDER EXEMPTED UNDER THE DILL.

REGARDING CHARGES LEVIED BY THE LENDER, A CLAUSE IN THE BILL PREVENTS A MONEY LENDER FROM EXACTING FROM THE BORROWER A SUM ON ACCOUNT OF COSTS, CHARGES OR EXPENSES INCIDENTAL TO THE LOAN.

HOWEVER, THE SPOKESMAN EXPLAINED: +AS THERE IS A FAIRLY WIDESPREAD COMMERCIAL PRACTICE BY REPUTABLE BODIES OF LEVYING FEES, THE REGISTRAR WILL BE EMPOWERED TO APPROVE CERTAIN CHARGES LIMITED TO SUCH AN AMOUNT OR PERCENTAGE AS HE SPECIFIES, OR TO EXEMPT CERTAIN GROUPS AFTER CONSULTING THE FINANCIAL SECRETARY.+

ANY MONEY LENDER COMMITTING AN OFFENCE UNDER THE NEW ORDINANCE WOULD BE LIABLE TO A FINE OF $100 000 AND IMPRISONMENT FOR TWO YEARS. THAT PENALTY ALSO APPLIES TO ALL CASES OF EXCESSIVE INTEREST RATES. FOR LESSER OFFENCES, THE PENALTY IS A $10 000 FINE AND SIX MONTHS' IMPRISONMENT,

/AND, A COURT