2004 Legislative Session: 5th Session, 37th Parliament
FIRST READING
The following electronic version is for informational
purposes only.
The printed version remains the official version.
HONOURABLE RICH COLEMAN
MINISTER OF PUBLIC SAFETY
AND SOLICITOR GENERAL
Part 5 -- Disclosure of the Cost of Consumer Credit
Division 1 -- Definitions and Application
57 (1) In this Part:
"advance", in respect of an advance under a credit agreement, means value received, within the meaning of subsection (2), by the borrower;
"APR" means the annual percentage rate calculated in accordance with the regulations;
"borrower" means a consumer who has entered into, or who is negotiating to enter into, a credit agreement if that consumer, under that agreement, receives or is to receive credit from another party to the agreement, but does not include a guarantor;
"cash customer" means a consumer who buys a product and who provides full payment for the product at or before the time of its receipt;
"cash price", in relation to a product, means,
(a) for a sale to a borrower by a credit grantor, or by an associate of the credit grantor, who sells the product to cash customers in the ordinary course of business,
(i) an amount that fairly represents the price for which the credit grantor or associate of the credit grantor sells that product to cash customers, or
(ii) if the credit grantor or associate of the credit grantor and the borrower agree on a lower price, that lower price,
(b) for a sale to which paragraph (a) does not apply, the price agreed on by the parties, or
(c) for an advertisement by a credit grantor or an associate of the credit grantor,
(i) the price at which the product is currently offered to cash customers or,
(ii) if the credit grantor or associate of the credit grantor does not currently offer the product to cash customers, the credit grantor's reasonable estimate of the price at which cash customers would buy those goods,
and, for the purpose of determining the amount advanced under a credit agreement, includes discounts, taxes and any other charges payable by a cash customer;
"credit agreement" means an agreement under which credit is extended and includes
(a) an agreement in relation to
(i) a loan of money,
(ii) a credit sale,
(iii) a line of credit, or
(iv) a credit card, and
(b) a renewal of an agreement referred to in this definition;
"credit card" means a card or other device that can be used to obtain advances under a credit agreement for open credit;
"credit grantor" means, subject to a regulation under section 196 (2) (a),
(a) a supplier who entered into, or who is negotiating to enter into, a credit agreement if that supplier, under that agreement, extends or is to extend credit to another party to the agreement, or
(b) if the rights of the supplier referred to in paragraph (a) under the credit agreement are assigned to an assignee, that assignee, on notice of the assignment being given to the borrower unless the assignment was requested by the borrower,
and includes a credit card issuer within the meaning of section 94 [definitions];
"credit sale" means a sale of a product in which the purchase is financed by the seller or manufacturer of the product or by an associate of the seller or manufacturer;
"default charge" means a charge imposed on a borrower who fails to make a payment as it comes due under a credit agreement or who fails to comply with any other obligation under a credit agreement, but does not include interest on an overdue payment;
"fixed credit" means credit under a credit agreement that is not for open credit;
"floating rate" means an interest rate that bears a specified mathematical relationship to an index rate, and includes an interest rate that
(a) is subject to a minimum or maximum rate, or
(b) is determined at the beginning of a period and applies throughout the period regardless of changes in the index rate during the period;
"grace period" means a period during which interest accrues but will be forgiven if the borrower satisfies conditions specified in the credit agreement;
"high-ratio mortgage" means a mortgage of real property under the security of which is advanced an amount that, when added to amounts advanced under mortgages ranking equally with or in priority to the mortgage, exceeds 75% of the value of the real property;
"index rate" means, in relation to a credit agreement, the rate that is specified in the credit agreement and published at least weekly in a manner that provides ready access to the rate by borrowers;
"initial disclosure statement" means, in relation to a credit agreement or lease, the disclosure statement that, under section 66 [disclosure statements must be given], is required for that credit agreement or lease;
"interest" means charges that accrue over time and are determined by applying a rate to an amount that is owing from time to time under a credit agreement;
"interest-free period" means a period, following the making of an advance, during which interest does not accrue on the advance;
"lease" means any agreement for the hire of goods, except an agreement for the hire of goods in connection with a tenancy agreement;
"lessee" means an individual who entered into, or who is negotiating to enter into, a lease if that individual, under that lease, hires or is to hire goods from another party to the agreement;
"lessor" means a person who entered into, or who is negotiating to enter into, a lease if that person, under that lease, leases or is to lease goods to another party to the agreement;
"loan broker" means, subject to a regulation under section 196 (2) (a), a person who, for compensation, arranges, negotiates or facilitates an extension of credit;
"mortgage loan" means a loan of money secured by an interest in real property, but does not include a prescribed loan;
"non-interest finance charge" means any charge that a borrower is required to pay in connection with a credit agreement, other than
(a) interest,
(b) a prepayment charge,
(c) a default charge,
(d) a charge for an optional service,
(e) a charge for a service referred to in subsection (2) (d), (e) or (f), or
(f) in the case of a credit sale, any charge that would also be payable by a cash customer;
"open credit" means credit under a credit agreement if the credit agreement
(a) anticipates multiple advances that are to be made when requested by the borrower in accordance with the agreement, and
(b) does not establish the total amount to be advanced to the borrower under the agreement, although it may impose a credit limit;
"optional service" means a service that is offered to a borrower in connection with a credit agreement and that the borrower does not have to accept in order to enter into the credit agreement;
"outstanding balance" means the total amount owing at any particular time under a credit agreement;
"payment", in respect of a payment under a credit agreement, means value given, within the meaning of subsection (4), by a borrower;
"payment period" means one of the intervals into which the term of a credit agreement or lease is divided for the purpose of determining the amount and timing of payments;
"periodic payment" means the payment that, under a credit agreement or a lease, is to be made in respect of each payment period;
"product" means goods or services, but does not include credit;
"security interest" means any interest in property that secures the borrower's obligations under a credit agreement;
"statement of account" means a statement of account referred to in section 92 (1) [statements of account];
"term" means,
(a) in relation to the duration of a credit agreement, except in respect of a credit agreement that is a lease, the period between the first advance and the end of the period in respect of which payments are required under the credit agreement, and
(b) in relation to the duration of a lease, means the period during which the lessee is entitled to retain possession of the leased goods;
"total cost of credit" means the difference between
(a) the payments made or to be made by the borrower in connection with a credit agreement, and
(b) the advance received or to be received by the borrower in connection with the credit agreement, disregarding the possibility of prepayment or default.
(2) The following constitute value received or to be received by a borrower in connection with a credit agreement:
(a) money transferred or to be transferred by the credit grantor to the borrower or to the order of the borrower under the credit agreement;
(b) the cash price of a product purchased or to be purchased under the credit agreement;
(c) the amount of a pre-existing monetary obligation of the borrower that is paid, discharged or consolidated or is to be paid, discharged or consolidated by the credit grantor under the credit agreement;
(d) the amount of money obtained or to be obtained or the cash price of a product obtained or to be obtained through the use of a credit card obtained under the credit agreement;
(e) any of the following expenses, if the credit grantor incurred or is to incur the expense for the purpose of arranging, documenting, insuring or securing the credit agreement:
(i) fees to a third party to record or register a document or information in, or to obtain a document or information from, a public registry of interests in real or personal property;
(ii) fees for professional services required for the purpose of confirming the value, condition, conformity to law or location of property that serves as security for a credit agreement, if the borrower is given a report signed by the person providing the professional services and is free to give the report to third persons;
(iii) premiums for
(A) insurance that protects the credit grantor against default on a high-ratio mortgage,
(B) casualty insurance on the subject matter of a security interest, if the borrower is a beneficiary of the insurance and the insured amount is the full insurable value of the subject matter, and
(C) any insurance provided or paid for by the credit grantor in connection with a credit agreement if the insurance is optional;
(iv) an application fee for insurance referred to in subparagraph (iii) (A);
(f) service provided or to be provided by the credit grantor to maintain a tax account on a high-ratio mortgage, expressed in the amount of a reasonable fee charged for that service, whether the tax account is required in connection with the credit agreement or is requested by the borrower;
(g) any other thing prescribed for the purposes of this subsection.
(3) Despite subsection (2), the following do not constitute value received or to be received by a borrower in connection with a credit agreement unless they relate to an optional service, to an expense or service under subsection (2) (e) or (f), or to a thing prescribed under subsection (2) (g) that is designated by regulation for the purposes of this subsection:
(a) money paid or to be paid, an expense incurred or to be incurred, or anything done or to be done by the credit grantor for the purpose of arranging, documenting, securing, administering or renewing the credit agreement;
(b) insurance provided or paid for or to be provided or paid for by the credit grantor in connection with the credit agreement;
(c) any other thing prescribed for the purposes of this subsection.
(4) The following constitute value given or to be given by a borrower in connection with a credit agreement:
(a) money transferred or to be transferred from the borrower to the credit grantor in connection with the credit agreement;
(b) money transferred or to be transferred from the borrower to a person other than the credit grantor in respect of a charge for services that the credit grantor requires the borrower to obtain or pay for in connection with the credit agreement, unless the charge
(i) is for an expense to which subsection (2) (e) or (g) would have applied if the expense had been incurred initially by the credit grantor and then charged directly to the borrower,
(ii) is for services provided by a lawyer or notary public chosen by the borrower, or
(iii) is for charges for shares in a credit union that a borrower must buy as a condition of entering into a credit agreement with the credit union;
(c) any other thing prescribed for the purposes of this subsection.
58 (1) In this section:
"borrower" includes a lessee;
"credit agreement" includes a lease;
"credit grantor" includes a lessor.
(2) Subject to subsection (3), this Part applies to a credit agreement if
(a) the borrower is an individual,
(b) the borrower enters into the credit agreement for primarily personal, family or household purposes, and
(c) the credit agreement
(i) is entered into by the credit grantor in the ordinary course of carrying on a business,
(ii) is arranged by a loan broker, or
(iii) is a prescribed credit agreement.
(3) This Part does not apply to the following:
(a) a lease unless the lease
(i) is for a fixed term of 4 months or more,
(ii) is for an indefinite term or is renewed automatically until one of the parties takes positive steps to terminate it, or
(iii) is a residual obligation lease within the meaning of section 100 (1);
(b) a credit agreement if
(i) the credit grantor is provided with a statement, in the credit agreement or other document, to the effect that the borrower has entered into the credit agreement for primarily business purposes,
(ii) the statement is signed by the borrower, and
(iii) the credit grantor believes in good faith that the statement is true;
(c) a credit sale if
(i) the credit sale agreement requires that the full amount of the sale price for the product will be paid by a single payment within a specified period and does not provide for a schedule of interest payments, or of payments of both principal and interest, to apply if the sale price is not paid within that period,
(ii) the credit sale is unconditionally interest-free during the period referred to in subparagraph (i),
(iii) the credit sale is unsecured, apart from any lien on the product that may arise by operation of law,
(iv) the credit sale is not assigned in the ordinary course of the credit grantor's business other than as security, and
(v) the credit sale does not provide for any non-interest finance charges;
(d) a credit agreement exempt by regulation.
59 (1) In this section, "credit grantor" includes a lessor.
(2) For the purpose of applying section 57 [definitions] to this section:
"borrower" includes a lessee;
"credit agreement" includes a lease.
(3) If a credit grantor who publishes an advertisement, or on whose behalf an advertisement is published, is required under this Part, as a result of disclosing certain information in the advertisement, to include other information in the advertisement, the credit grantor must ensure that
(a) if the required information is the APR, the APR is disclosed at least as prominently as is the information that necessitated the inclusion of the APR, and
(b) any other required information is prominently displayed in a clear and comprehensible manner.
60 (1) This section applies only to advertisements that
(a) offer credit under a credit agreement that extends fixed credit, and
(b) state the interest rate or amount of any payment.
(2) A credit grantor must ensure that every advertisement published by or on behalf of the credit grantor discloses, in relation to the proposed credit agreement,
(a) the APR, and
(b) the term.
(3) In addition to complying with subsection (2), the credit grantor must ensure that,
(a) if the advertisement is for a credit sale of a specifically identified product, the advertisement discloses the cash price of that product, or
(b) if the advertisement is for a credit sale of a specifically identified product in connection with which a non-interest finance charge is to be payable, the advertisement discloses
(i) the cash price of the product, and
(ii) the total cost of credit.
61 (1) This section applies only to advertisements that offer credit under a credit agreement that extends open credit.
(2) A credit grantor must ensure that every advertisement published by or on behalf of the credit grantor that gives specific information about the cost of open credit must disclose,
(a) if the open credit is not associated with a credit card, the APR for the open credit, or
(b) if the open credit is associated with a credit card,
(i) the current annual interest rate, and
(ii) any initial or periodic non-interest finance charges.
62 (1) This section applies to an advertisement to which section 60 [advertising requirements applicable to fixed credit] or 61 [advertising requirements applicable to open credit] applies.
(2) An advertisement that states or implies that no interest is payable for a certain period in respect of a consumer transaction must disclose whether, under the credit agreement, the transaction
(a) has an interest-free period, or
(b) has a grace period.
(3) If, under the credit agreement, the transaction has a grace period, the advertisement must also disclose the conditions under which the interest accrued during the period will be forgiven and,
(a) if the credit agreement extends fixed credit, the APR that will apply to the period if those conditions are not met, or
(b) if the credit agreement extends open credit, the annual interest rate that will apply to the period if those conditions are not met.
(4) An advertisement to which subsection (2) applies that does not disclose the information required under subsections (2) (b) and (3) is deemed to represent that the transaction is unconditionally interest-free during the relevant period.
63 (1) In this section, "estimated residual cash payment" and "estimated residual value" have the same meaning as in section 100 (1) [definitions].
(2) For the purpose of applying section 57 [definitions] to this section, a reference in that section to "borrower", "cash price", "credit agreement", "credit grantor" or "purchased" is deemed to be a reference to "lessee", "cash value", "lease", "lessor" or "leased", respectively.
(3) Subject to the regulations, a lessor must ensure that every advertisement published by or on behalf of the lessor that gives specific information about the cost of a lease discloses the following information:
(a) a statement that the consumer transaction is a lease;
(b) the term of the lease;
(c) the nature and amount of any payments that are payable by the lessee on or before the beginning of the term;
(d) the amount, timing and number of the periodic payments;
(e) the nature and amount of any other payments that are payable by a lessee in the ordinary course of events;
(f) the lease APR;
(g) if required by regulations under this or any other enactment, prescribed information regarding extra charges based on usage of the leased goods.
64 (1) If this Part requires that certain information be included in an advertisement and if that information is different for different credit agreements to which the advertisement relates, the advertisement must disclose that information as it applies to a representative transaction and must identify the transaction as a representative transaction.
(2) For the purposes of subsection (1), a transaction is a representative transaction if its terms are reasonably typical of the terms of the credit agreements to which the advertisement relates.
Division 3 -- Disclosure Requirements Applicable to All Credit Agreements
65 In this Division:
"borrower" includes a lessee;
"credit agreement" includes a lease;
"credit grantor" includes a lessor.
66 (1) In this section, "business day", in relation to a credit grantor, means a day on which the credit grantor is open for business.
(2) Subject to subsection (3), a credit grantor who has entered into, or who is negotiating to enter into, a credit agreement with a borrower must give the borrower a disclosure statement in relation to the credit agreement before the earlier of
(a) the borrower entering into the credit agreement, and
(b) the borrower making any payment in connection with the credit agreement.
(3) Subject to subsection (4), a credit grantor who has entered into, or who is negotiating to enter into, a credit agreement to provide a mortgage loan to a borrower must give a disclosure statement in relation to the credit agreement to the borrower at least 2 business days before the earlier of
(a) the date on which the borrower incurs any obligation to the credit grantor in connection with the mortgage loan, other than an obligation in respect of an expense referred to in section 57 (2) (e) [value received or to be received by a borrower] or a prescribed expense, and
(b) the date on which the borrower makes any payment to the credit grantor in connection with the mortgage loan, other than a payment in respect of an expense referred to in section 57 (2) (e) [value received or to be received by a borrower] or a prescribed expense.
(4) The borrower under a credit agreement referred to in subsection (3) may waive the time period referred to in that subsection subject to and in accordance with any prescribed terms and conditions.
67 (1) A credit grantor who is required to give a disclosure statement or a statement of account under this Part must ensure that the statement
(a) is in writing,
(b) contains the information required under this Part, and
(c) prominently displays that information in a clear and comprehensible manner.
(2) A disclosure statement or a statement of account may be a separate document or part of another document.
68 If there is more than one borrower under a credit agreement, a disclosure statement, notice or other document that, under this Part, is required to be given to the borrower may be given to any one of the borrowers, and the credit grantor is not required to give a separate disclosure statement, notice or other document to each borrower.
69 Information disclosed under this Part, whether in a disclosure statement or advertisement or otherwise, may be based on an estimate or assumption if
(a) the disclosure depends on information that is not ascertainable by the credit grantor at the time of disclosure, and
(b) the estimate or assumption is reasonable and is clearly identified as an estimate or assumption.
70 If information in a disclosure statement is inconsistent with any information or provision set out in the credit agreement, the credit agreement is presumed to incorporate the information or provision that is more favourable to the borrower, unless it is proven that the less favourable information or provision reflects the borrower's actual understanding of the provisions of the agreement.
Division 4 -- Rights and Obligations of Borrowers and Credit Grantors
71 (1) A borrower who is required by a credit grantor to purchase insurance may purchase it from any insurer authorized to provide that type of insurance in British Columbia, except that the credit grantor may reserve the right to disapprove, on reasonable grounds, an insurer selected by the borrower.
(2) A credit grantor who offers to provide or to arrange insurance referred to in subsection (1) must clearly disclose to the borrower in writing, at the time of that offer, that the borrower may, subject to subsection (1), purchase the required insurance through an insurance agent and insurer of the borrower's choice.
72 (1) In this section, "revolving mortgage loan" means a mortgage loan that
(a) secures the money owing to the credit grantor under a revolving line of credit, and
(b) enables the borrower to obtain additional advances from the credit grantor following full repayment of the principal and interest owing under the mortgage loan.
(2) The credit grantor must give to the borrower a discharge of the mortgage loan, registrable under the Land Title Act, within 30 days after
(a) the whole amount of principal and interest owing under the mortgage loan has been repaid to the credit grantor, and
(b) if the mortgage loan is a revolving mortgage loan, the borrower has requested a registrable discharge of the mortgage loan from the credit grantor.
(3) A credit grantor must not charge or accept any amount for or in relation to the provision to the borrower of a discharge of mortgage under subsection (2) that exceeds the maximum amount prescribed.
73 (1) A borrower may cancel an optional service of a continuing nature that is provided by the credit grantor or by an associate of the credit grantor by giving 30 days' notice, or a shorter period of notice as is provided for by the agreement under which the service is provided.
(2) A borrower who cancels an optional service in accordance with subsection (1)
(a) is not liable for charges relating to any portion of the service that has not been provided at the time of the effective date of the cancellation, and
(b) is entitled to a refund of any amount already paid for those charges.
74 (1) This section does not apply to a credit agreement that is a mortgage loan.
(2) A borrower is entitled to prepay the full outstanding balance owing under a credit agreement at any time without incurring any prepayment charge or penalty.
(3) If a prepayment under subsection (2) is made in relation to a credit agreement for fixed credit, the credit grantor must refund or credit to the borrower the prescribed portion of any non-interest finance charges paid by the borrower or added to the outstanding balance.
(4) A borrower is entitled, on any scheduled payment date, or at least monthly, to prepay less than the full outstanding balance owing under a credit agreement for fixed credit, without any prepayment charge or penalty, but, in that event, is not entitled to a refund or credit of any non-interest finance charges.
75 A credit grantor must not impose, under a credit agreement, any default charges other than the following:
(a) court ordered costs incurred in collecting or attempting to collect a debt;
(b) reasonable charges in respect of costs, including legal costs, incurred in realizing a security interest or protecting the subject matter of a security interest after default;
(c) reasonable charges that reflect costs incurred by the credit grantor because a cheque or other payment instrument given by the borrower to the credit grantor was dishonoured.
76 (1) If a credit grantor invites a borrower to defer making a payment that would otherwise be due under a credit agreement, the credit grantor must clearly disclose, in that invitation, whether or not interest will accrue on the unpaid amount during the period for which payment is deferred.
(2) If an invitation referred to in subsection (1) does not disclose whether or not interest will accrue on the unpaid amount during the period for which payment is deferred, the credit grantor is deemed to waive the interest that would otherwise accrue during that period.
77 (1) This section does not apply to a credit agreement that is a mortgage loan.
(2) A credit agreement may provide that, when the borrower is in default or in any other circumstance provided by the credit agreement, the credit grantor may accelerate payment by the borrower so as to require repayment of the whole amount outstanding under the credit agreement.
(3) Subject to subsection (5), if a credit agreement contains the provision referred to in subsection (2) and the credit grantor wishes, in a situation described in subsection (2), to accelerate payment by the borrower, the credit grantor must give written notice to the borrower of the credit grantor's intention to accelerate payment.
(4) The notice referred to in subsection (3) must
(a) be given personally to the borrower or be sent by registered mail to the last known address of the borrower, and
(b) must contain
(i) a description of the default or other circumstances,
(ii) a statement of the amount required to satisfy the borrower's obligations and the applicable rate of interest, and
(iii) a statement that, unless the default or circumstances described have been remedied within 10 days after the notice was given or sent under paragraph (a), the whole amount outstanding under the credit agreement will be due and payable.
(5) The credit grantor must not accelerate payment under this section if
(a) the credit grantor fails to comply with subsections (3) and (4), or
(b) the default by the borrower is remedied within the period specified under subsection (4) (b) (iii).
(6) If there is a conflict between this section and a provision of any other Act, the provision of that other Act prevails.
Division 5 -- Credit Arranged by Loan Brokers
78 In this Division, "brokerage fee" means an amount that a borrower pays or agrees to pay to a loan broker in consideration of the loan broker's services in arranging, negotiating or facilitating or attempting to arrange, negotiate or facilitate the extending of credit to the borrower, and includes an amount that is
(a) deducted from the amount of credit that is extended to the borrower under the credit agreement, and
(b) paid to the loan broker by the credit grantor.
79 If a loan broker secures for a borrower an extension of credit from a credit grantor who does not provide credit in the ordinary course of carrying on business,
(a) the provisions of this Part and the regulations relating to this Part that impose a duty on a credit grantor must be read as imposing that duty on the loan broker rather than on the credit grantor, and
(b) if the borrower pays or is required to pay a brokerage fee, the loan broker must ensure that the initial disclosure statement for the credit agreement
(i) discloses the amount of the brokerage fee, and
(ii) accounts for the brokerage fee in the APR and the total cost of credit.
80 (1) If a loan broker secures for a borrower an extension of credit from a credit grantor who provides credit in the ordinary course of carrying on business,
(a) the credit grantor must ensure that the initial disclosure statement for the credit agreement, if the credit grantor deducts a brokerage fee from the advance,
(i) discloses the amount of the brokerage fee, and
(ii) accounts for the brokerage fee in the APR and the total cost of credit, and
(b) the loan broker must give to the borrower, if the loan broker takes a loan application from the borrower and forwards it to the credit grantor,
(i) a disclosure statement containing the information referred to in paragraph (a), and
(ii) any other information that, under this Part, is required to be disclosed in the initial disclosure statement for the credit agreement.
(2) If the loan broker gives the borrower a disclosure statement under subsection (1) (b), the credit grantor may
(a) adopt that disclosure statement as its own disclosure statement, in which case the credit grantor is jointly and severally liable with the loan broker for the contents of that statement, or
(b) elect to give the borrower a separate disclosure statement containing the information that, under this Part, is required to be disclosed.
Division 6 -- Disclosure Required in Relation to Fixed Credit
81 In this Division, "scheduled-payments credit agreement" means a credit agreement for fixed credit under which the amount advanced is to be repaid in accordance with a specified schedule of payments, which schedule of payments may be subject to adjustment to accommodate contingencies, including changes in the interest rate.
82 This Division applies only to credit agreements that extend fixed credit.
83 If fixed credit is extended under a credit sale, the credit grantor must ensure that the credit agreement is a scheduled-payments credit agreement.
84 A credit grantor who has entered into, or who is negotiating to enter into, a credit agreement must ensure that the initial disclosure statement for that credit agreement discloses the following information:
(a) the effective date of the statement;
(b) for a credit sale, a description of the product;
(c) the outstanding balance after application of every payment made by the borrower on or before the effective date of the statement;
(d) the nature and amount of each advance, charge or payment accounted for in the outstanding balance disclosed under paragraph (c);
(e) the date on which interest begins to accrue and the details of any grace period;
(f) the annual interest rate and the circumstances under which unpaid interest will be compounded;
(g) if the annual interest rate may change during the term,
(i) the initial annual interest rate and the compounding period,
(ii) the method of determining the annual interest rate at any time, and
(iii) unless the amount of the scheduled payments is adjusted automatically to account for changes in the annual interest rate, the lowest annual interest rate, based on the initial outstanding balance, at which the payments would not cover the interest that would accrue between payments;
(h) the nature and amount of any charges, other than interest, that are not disclosed under paragraph (d) but that are payable or will become payable by the borrower in connection with the credit agreement;
(i) the total of all advances made or to be made in connection with the credit agreement;
(j) the APR;
(k) the nature of any default charges provided for by the credit agreement;
(l) a description of the subject matter of any security interest;
(m) for a mortgage loan, a statement of the conditions, if any, under which the borrower may make prepayments, and any charge for prepayment;
(n) for a credit agreement that does not relate to a mortgage loan, a statement that the borrower is entitled to prepay the full outstanding balance at any time without any prepayment charge or penalty and is entitled to make partial payments without penalty on any scheduled payment date or at least monthly;
(o) the nature, amount and timing of payments for any optional services purchased by the borrower for which payments are to be made to or through the credit grantor;
(p) the conditions under which the borrower may terminate services referred to in paragraph (o);
(q) if the credit agreement is a scheduled-payments credit agreement,
(i) the term of the agreement,
(ii) the amortization period if it is longer than the term,
(iii) the amount and timing of any advances to be made after the effective date of the statement,
(iv) the amount and timing of any payments to be made after the effective date of the statement,
(v) the total of all payments to be made in connection with the credit agreement, and
(vi) the total cost of credit;
(r) if the credit agreement is not a scheduled-payments credit agreement,
(i) the circumstances in which the outstanding balance, or any portion of it, must be paid, or
(ii) the specific provisions of the credit agreement that describe those circumstances.
85 (1) In addition to the disclosure statement required under section 84 [initial disclosure statements for fixed credit], if the interest rate is a floating rate, the credit grantor, at least once every 12 months, must give the borrower a disclosure statement that contains the following information:
(a) the period covered by the statement, which period must run from the date of the disclosure statement most recently given to the borrower under this section or section 84;
(b) the annual interest rate at the beginning and end of that period;
(c) the outstanding balance at the beginning and end of that period;
(d) for a scheduled-payments credit agreement, the amount and timing of all remaining payments, based on the annual interest rate that applies at the end of that period.
(2) In addition to the disclosure statement required under section 84 [initial disclosure statements for fixed credit], if the interest rate is not a floating rate but is subject to change, the credit grantor, within 30 days after the date on which the annual interest rate becomes 1% or more higher than the rate most recently disclosed to the borrower in writing, must give the borrower a disclosure statement that contains the following information:
(a) the date of the statement;
(b) the new annual interest rate and the date the new rate took effect;
(c) the new amount, and timing, of any payments to be made after the date referred to in paragraph (b).
86 (1) In addition to any other documents that the credit grantor must give under this Part to the borrower, the credit grantor must give the borrower a notice in writing in accordance with subsection (2) if
(a) the outstanding principal on a scheduled-payments credit agreement increases as a result of
(i) the compounding of interest on a missed or late payment, or
(ii) the imposition of a default charge, and
(b) as a result of the increase in outstanding principal, the total amount of the payments the borrower is scheduled to make over a payment period does not cover the interest that will accrue during that payment period.
(2) A notice under subsection (1)
(a) must be given to the borrower, within 30 days after the most recently missed or late payment or default charge imposed, as the case may be, and
(b) must specify
(i) that the outstanding principal has increased, and the reason for that increase, and
(ii) that, because of the increase in principal, the subsequent scheduled payments will not cover the interest that will accrue in each payment period.
87 (1) Subject to subsection (3), if a credit agreement is amended, the credit grantor must give a supplementary disclosure statement to the borrower within 30 days after the amendment is made.
(2) The supplementary disclosure statement must set out the changed information, but need not repeat any information that is unchanged from the previous disclosure statement.
(3) This section does not apply to changes effected by a renewal to which section 88 [disclosure regarding renewals] or 89 [disclosure regarding mortgage loan renewals] applies.
88 (1) A credit grantor who is willing to renew a credit agreement must give the borrower, in accordance with subsection (2), a disclosure statement, based on the assumption that the borrower will make all payments that are due under the current credit agreement, that includes the following information respecting the renewed credit agreement:
(a) the effective date;
(b) the outstanding balance of the credit agreement as of the effective date;
(c) any non-interest finance charges that are payable under or in connection with the credit agreement;
(d) the term of the renewed credit agreement;
(e) the relevant interest rate information referred to in section 84 (f) or (g) [initial disclosure statements for fixed credit];
(f) the APR;
(g) the amount and timing of all payments to be made under or in connection with the renewed credit agreement;
(h) the total of all payments to be made under or in connection with the renewed credit agreement;
(i) the total cost of credit;
(j) the amortization period;
(k) a statement of the conditions, if any, under which the borrower may make prepayments, and any charge for prepayment.
(2) The credit grantor must give the disclosure statement to the borrower
(a) if the credit agreement is a mortgage loan, with the notice referred to in section 89 (1) [disclosure regarding mortgage loan renewals], or
(b) if the credit agreement is not a mortgage loan, on or before the renewal date.
89 (1) If the amortization period for a mortgage loan under a scheduled-payments credit agreement is longer than the term of the mortgage loan, the credit grantor must notify the borrower in writing, at least 21 days before the end of the term, whether or not the credit grantor is willing to renew the mortgage loan for a further term.
(2) In addition to any other legal, equitable or statutory remedy available to the borrower but subject to subsection (3), if a mortgage loan is to be renewed but the credit grantor does not give the borrower, at least 21 days before the effective date of the renewed mortgage loan, a disclosure statement that reflects the terms of the renewed mortgage loan,
(a) the credit grantor must give the borrower, on or before the effective date of the renewed mortgage loan, a disclosure statement that reflects the terms of the renewed mortgage loan,
(b) the borrower may pay, within 21 days after receiving the disclosure statement referred to in paragraph (a), the outstanding balance of the mortgage loan without penalty, and
(c) if the borrower pays the outstanding balance of the mortgage loan in accordance with paragraph (b), the credit grantor must refund to the borrower any non-interest finance charges imposed in connection with the renewal.
(3) Subsection (2) does not apply if
(a) a credit grantor gives the borrower a disclosure statement in relation to the renewed mortgage loan at least 21 days before the effective date of the renewed mortgage loan, and
(b) that statement does not reflect the terms of the renewed mortgage loan by reason only that
(i) the outstanding balance of the mortgage loan on the effective date of the renewed mortgage loan differs from what was stated in the disclosure statement because of one or more missed, late, early or extra payments,
(ii) the interest rate under the renewed mortgage loan is lower than the interest rate stated in the disclosure statement, or
(iii) the amortization period or frequency of payments under the renewed mortgage loan differs from what was stated in the disclosure statement.
(4) If subsection (3) applies, the credit grantor must give the borrower, within 30 days after the effective date of the renewed mortgage loan, a revised disclosure statement that reflects the terms of the renewed mortgage loan.
Division 7 -- Disclosure Required in Relation to Open Credit
90 This Division applies only to credit agreements that extend open credit.
91 (1) A credit grantor who has entered into, or who is negotiating to enter into, a credit agreement must ensure that the initial disclosure statement for that credit agreement discloses the following information:
(a) the effective date of the statement;
(b) the credit limit;
(c) the minimum periodic payment or the method of determining the minimum periodic payment;
(d) the initial annual interest rate and the compounding period;
(e) if the annual interest rate may change, the method of determining the annual interest rate at any time;
(f) when interest begins to accrue on advances or different types of advances and information concerning any grace period;
(g) the nature of any non-interest finance charges that may become payable by the borrower under the credit agreement and the amount, or the method of determining the amount, of those charges;
(h) for open credit that is not associated with a credit card, the APR;
(i) any optional services purchased by the borrower that are payable to or through the credit grantor, the charges for those optional services and the conditions under which the borrower may terminate the services;
(j) a description of the subject matter of any security interest;
(k) the nature of any default charges provided for by the credit agreement;
(l) how often the borrower will receive statements of account;
(m) a telephone number in accordance with section 92 (3) [statements of account].
(2) Despite subsection (1),
(a) the credit limit referred to in subsection (1) (b) may be disclosed
(i) in the first statement of account given to the borrower, or
(ii) in a separate statement given to the borrower on or before the date on which the borrower receives the first statement of account, and
(b) the following information may be disclosed in a separate statement given to the borrower before the services are provided or the transaction occurs:
(i) information about the nature and amount of charges for any optional service referred to in subsection (1) (i);
(ii) information that relates to a specific transaction under the credit agreement.
92 (1) Subject to subsection (2), the credit grantor must give the borrower, at least monthly, a statement of account that contains the following information:
(a) the period covered by the statement, which period must run from the date of the first advance or, if a statement of account has been given under this section, from the date of the statement of account most recently given to the borrower;
(b) the outstanding balance at the beginning of the statement period;
(c) the posting date, description and amount of each transaction or charge added to the outstanding balance during the statement period;
(d) the posting date and amount of each payment or credit subtracted from the outstanding balance during the statement period;
(e) the annual interest rate or rates in effect during the statement period or any part of that period;
(f) the total of all amounts added to the outstanding balance during the statement period;
(g) the total of all amounts subtracted from the outstanding balance during the statement period;
(h) the outstanding balance at the end of the statement period;
(i) the credit limit;
(j) the minimum payment;
(k) the due date for payment;
(l) the amount that the borrower must pay on or before the due date in order to take advantage of a grace period;
(m) the borrower's rights and obligations regarding the correction of billing errors;
(n) a telephone number in accordance with subsection (3).
(2) A credit grantor is not required to send a statement of account to a borrower at the end of any period during which there has been no advance or payment if
(a) there is no outstanding balance at the end of the period, or
(b) the borrower is in default and the credit grantor has
(i) demanded payment of the outstanding balance, and
(ii) given notice to the borrower that the borrower's privileges to obtain advances under the agreement have been cancelled or suspended because of the default.
(3) For the purposes of subsection (1) (n) and section 91 (1) (m) [initial disclosure statements for open credit], the credit grantor must
(a) provide a telephone number that the borrower can use, at no charge, to obtain information about the borrower's account during the credit grantor's ordinary business hours, and
(b) ensure that the information about the borrower's account is available at the number during those hours.
93 (1) In this section, "event" means a transaction, charge, payment or credit.
(2) An event is sufficiently described for the purposes of section 92 (1) (c) and (d) [statements of account] if the description in the statement of account, along with any event record included with the statement of account or made available to the borrower at the time of the event, can reasonably be expected to enable the borrower to verify the event.
94 In this Division:
"cardholder" means an individual who is a borrower in relation to a credit card;
"credit card issuer" means a person who is a credit grantor in relation to a credit card.
95 This Division applies only to credit agreements that extend open credit.
96 (1) A credit card issuer must not issue a credit card to an individual who has not applied for the card.
(2) Subsection (1) does not apply to a credit card that is issued to an individual to replace or renew a card that was applied for and issued to that individual.
97 (1) A credit card issuer who has entered into, or who is negotiating to enter into, a credit agreement for a credit card must ensure that the application form for that credit card discloses the following information or complies with subsection (2):
(a) if the interest rate payable under the credit agreement is a fixed rate of interest, that interest rate expressed as an annual interest rate;
(b) if the interest rate payable under the credit agreement is a floating rate, the index rate and the manner by which that rate is to be modified to obtain the interest rate payable under the credit agreement;
(c) the grace period, if any;
(d) the nature and amount of any non-interest finance charges that are payable or may become payable by the cardholder;
(e) the date as of which the information referred to in paragraphs (a) to (d) is in effect.
(2) Instead of disclosing the information required by subsection (1), the credit card issuer
(a) may disclose in the application form a telephone number that the cardholder can use, at no charge, to obtain that information during the credit card issuer's ordinary business hours, and
(b) must ensure that the information is available at the number during those hours.
(3) Despite subsection (2), if an individual applies for a credit card in person, by telephone or by any electronic means, the credit card issuer must disclose the information referred to in subsection (1) when the individual makes the application.
(4) An individual who applies for a credit card without signing an application form is deemed, on using the credit card for the first time, to have entered into a credit agreement in relation to that card in the terms of the disclosure statement referred to in subsection (5).
(5) Nothing in this section relieves the credit card issuer from the requirement to give a disclosure statement in accordance with sections 66 [disclosure statements must be given] and 91 [contents of initial disclosure statement for open credit].
98 (1) In addition to the information required by section 91 [contents of initial disclosure statement for open credit] to be disclosed, a credit card issuer must disclose, in the initial disclosure statement for a credit card, the cardholder's maximum liability for unauthorized use of the credit card if it is lost or stolen.
(2) The credit card issuer must notify the cardholder of any change in the information disclosed in a disclosure statement,
(a) in the case of a change to the following information, in the next statement of account following the change in information or in a document that is given to the cardholder with the next statement of account:
(i) a change in the credit limit;
(ii) a decrease in the interest rate or the amount of any other charge;
(iii) an increase in the length of an interest-free period or grace period;
(iv) a change in a floating interest rate, or
(b) in any other case, at least 30 days before the date that the change takes effect.
99 (1) A cardholder who has reported, orally or in writing, a lost or stolen credit card, or the unauthorized use of the credit card or credit card number, to the credit card issuer is not liable for any debt incurred through the use of that card after the credit card issuer receives the report.
(2) The maximum total liability of a cardholder arising from unauthorized use of a lost or stolen credit card before the issuer receives notice under subsection (1) is the lesser of
(a) $50, and
(b) the maximum amount set by the credit agreement in relation to the credit card.
(3) Subsection (2) does not apply to the use of a credit card in conjunction with a personal identification number at a device commonly referred to as an automated teller machine.
100 (1) In this Division:
"assumed residual payment" means,
(a) for an option lease under which the option price at the end of the term is less than the estimated residual value, that option price, and
(b) in any other case, the estimated residual value plus any amount that the lessee will be required to pay in the ordinary course of events at the end of the term;
"capitalized amount" means the amount determined by
(a) adding
(i) the cash value of the leased goods, and
(ii) the amount of any other advances made to the lessee at or before the beginning of the term, and
(b) subtracting from the amount determined under paragraph (a) the total amount of all payments made by the lessee at or before the beginning of the term, not including
(i) any refundable security deposit, and
(ii) any periodic payment;
"cash value", in relation to leased goods, means
(a) if the lessor or an associate of the lessor sells like goods to cash customers in the ordinary course of carrying on business,
(i) a value that fairly represents the price for which the lessor or associate of the lessor sells those goods to cash customers, or
(ii) if the lessor and the lessee agree on a lower cash value, that lower cash value, or
(b) if the lessor or an associate of the lessor does not sell like goods to cash customers in the ordinary course of carrying on business,
(i) the lessor's reasonable estimate of the price at which cash customers would buy those goods, or
(ii) if the lessor and the lessee agree on a lower cash value, that lower cash value;
"estimated residual cash payment" means the amount that the lessee will be required to pay to the lessor at the end of the term of a residual obligation lease if the realizable value of the leased goods at the end of the term equals their estimated residual value;
"estimated residual value" means the reasonable estimate, made by the lessor at the time the lease was entered into, of the wholesale value of the leased goods at the end of the term;
"implicit finance charge" means the amount determined, in connection with a lease, by
(a) adding
(i) all non-refundable payments required to be made by the lessee at or before the beginning of, or during, the term, and
(ii) the assumed residual payment, and
(b) subtracting from the amount determined under paragraph (a) the total amount of the advances received by the lessee;
"option lease" means a lease that gives the lessee the right to acquire title to or retain permanent possession of the leased goods by making a payment in addition to the payments required under the lease or by satisfying other specified conditions;
"option price" means the amount of the additional payment that the lessee must make in order to exercise the option under an option lease;
"realizable value" means the realizable value of leased goods at the end of the lease term as calculated in accordance with the regulations;
"residual obligation lease" means a lease under which, subject to section 102 [maximum liability under residual obligation leases], the lessee may be required to pay the lessor at the end of the lease term an amount based wholly or partly on the difference, if any, between the estimated residual value and the realizable value of the leased goods;
"total lease cost" means the total of any non-refundable payments that the lessee will be required to make in the ordinary course of events.
(2) For the purpose of applying section 57 [definitions] to this Division, a reference in that section to "borrower", "cash price", "credit agreement", "credit grantor" or "purchased" is deemed to be a reference to "lessee", "cash value", "lease", "lessor" or "leased", respectively.
101 (1) A lessor who has entered into, or who is negotiating to enter into, a lease must ensure that the initial disclosure statement for that lease discloses the following information:
(a) the effective date of the statement;
(b) a statement that the transaction is a lease;
(c) a description of the leased goods;
(d) the term of the lease;
(e) the cash value of the leased goods;
(f) the nature and amount of any other advance received, and of each charge incurred, by the lessee in connection with the lease at or before the beginning of the term;
(g) the nature and amount of each payment made by the lessee at or before the beginning of the term;
(h) the capitalized amount;
(i) the amount, timing and number of the periodic payments;
(j) the estimated residual value of the leased goods;
(k) for an option lease,
(i) how and when the option may be exercised,
(ii) the option price if the option is exercised at the end of the term, and
(iii) the method of determining the option price if the option is exercised before the end of the term;
(l) for a residual obligation lease,
(i) the estimated residual cash payment, and
(ii) a statement that the lessee's maximum liability at the end of the term is the sum of
(A) the estimated residual cash payment, and
(B) the estimated residual value less the realizable value of the leased goods;
(m) the circumstances, if any, under which the lessee or the lessor may terminate the lease before the end of the term and the amount, or the method of determining the amount, of any payment that the lessee will be required to make on early termination of the lease;
(n) if there are circumstances in which the lessee will be required to make a payment in connection with the lease and if that payment is not a payment required to be disclosed under paragraphs (g) to (m),
(i) the circumstances, and
(ii) the amount of the payment or the method of determining the amount;
(o) the implicit finance charge;
(p) the APR;
(q) the total lease cost.
(2) The circumstances referred to in subsection (1) (n) include, without limitation, unreasonable wear or excess use.
102 The lessee's maximum liability at the end of the term of a residual obligation lease after returning the leased goods to the lessor is the sum of the following amounts as calculated in accordance with the regulations:
(a) the estimated residual cash payment;
(b) the estimated residual value less the realizable value of the leased goods.
103 In this Division:
"borrower" includes a lessee;
"credit agreement" includes a lease;
"credit grantor" includes a lessor and a loan broker.
104 Despite any agreement to the contrary, if a borrower makes a payment to a credit grantor that the credit grantor is not entitled to receive, the credit grantor must
(a) refund the payment to the borrower, or
(b) if the parties agree, credit the payment against the outstanding balance of the credit agreement as of the time the payment was made.
105 (1) A credit grantor who contravenes this Act or the regulations must compensate a borrower for any loss the borrower suffers because of the contravention, and the compensation to which the borrower is entitled may be set off against any money then due and payable under the credit agreement.
(2) The balance of the compensation, following any set off under subsection (1), may
(a) in accordance with the request of the borrower, be set off against the outstanding balance of the credit agreement or paid to the borrower, or
(b) be recovered in an action under section 171 [damages recoverable].
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