Province plans tougher rules for payday loan, cheque-cashing firms

Ontario's Legislative Building sits on the historic grounds of Queen's Park in downtown Toronto. (Frank Gunn / CP)

The provincial government has announced it will introduce legislation to boost protections for consumers using high-cost alternative financial services, such as payday loans and cheque-cashing services.

The proposed legislation would impose a cap on the rate of cheque-cashing services and provide a grace period for repayment for those using rent-to-own services.

Repeat users of payday loans would also get the option of a longer repayment period.

Consumer Services Minister David Orazietti says in a statement that the changes are aimed at protecting Ontarians from a cycle of personal debt.