Gary Schwartz
President | CEO
Ensuring Responsible Access to Credit for All Quebecers
Abstract: The Canadian Lenders Association (CLA) responds to Quebec’s proposed Bill 72, which seeks to amend the Consumer Protection Act to prevent abusive credit practices. While the CLA supports stronger consumer protections, it warns the bill may unintentionally restrict access to credit, particularly for underserved consumers, driving them towards unregulated lenders. The CLA advocates for a balanced approach that ensures financial inclusion, urging revisions to protect responsible lenders and preserve access to essential credit services. Collaboration between the government and industry stakeholders is crucial to refining the bill without harming Quebecers who rely on credit.
The CLA represents over 300 businesses across Canada, offering a diverse range of credit products, particularly to those underserved by traditional financial institutions. Many of these individuals—over 8.6 million Canadians—find themselves excluded from mainstream credit systems.
These borrowers are either new to credit, have thin credit histories, or face temporary financial difficulties. Restricting access to credit will not eliminate their needs; rather, it could create a vacuum, forcing these individuals to seek unregulated, predatory alternatives, precisely what Bill 72 seeks to prevent.
👉 The Benefits of Credit Access
Credit access plays a critical role in fostering financial resilience. Our members, through responsible lending practices and advanced underwriting technologies, provide solutions to Canadians who otherwise would have no options. They offer products that comply with all regulatory frameworks and are designed to support customers in building or rebuilding their credit. Consumers who would otherwise be excluded from financial services gain access to necessary funds for education, home repairs, medical expenses, and other essential life events. The broader economy benefits when all individuals can participate in the credit system.
However, as currently drafted, Bill 72 introduces several challenges that could unintentionally result in financial exclusion for these very consumers. For instance, a key measure in the bill requires that membership or renewal fees in credit card contracts be charged only once per year. While this may seem protective on the surface, it threatens the viability of many credit providers, leading to the potential exit of responsible lenders from the market. The outcome would be devastating for the Quebecers who depend on these services for their financial well-being.
👉 Working Toward Solutions
We fully support the government’s effort to clamp down on abusive business practices. The requirement for permits for revolving (open) credit contracts, for instance, is a positive step toward filtering out bad actors in the financial services space. However, a one-size-fits-all regulatory framework may do more harm than good. Responsible lenders who comply with the legal framework must not be penalized alongside those operating outside of it. Instead, we need a regulatory system that ensures proper oversight while still allowing consumers to access essential credit services.
We believe there are alternative solutions to strengthen consumer protection without sacrificing financial inclusion. For example, clearer delineation between licensed lenders and predatory entities, coupled with robust enforcement, would achieve the government’s goal without unintended consequences for Quebecers who rely on credit.
👉 Bill 72 Intended Purpose
The CLA is eager to collaborate with the Quebec government to refine Bill 72 in ways that protect consumers while preserving their access to credit. We believe it is essential to engage in a constructive dialogue, where industry expertise can help shape regulations that foster financial inclusion and provide the necessary consumer protections.
Our commitment to responsible lending remains unwavering. We are ready to work hand-in-hand with policymakers to ensure that Quebec’s credit ecosystem remains robust, competitive, and above all, fair. We encourage the government to convene stakeholders and consider revisions that strike the right balance between consumer protection and financial accessibility.
The entire market benefits when all consumers have access to credit. Let’s ensure that Bill 72 achieves its intended purpose without leaving Quebecers behind.