Prosecutors opt against N.L. payday loan criminal charges

Provincial prosecutors have opted against proceeding with criminal charges related to Newfoundland and Labrador's payday loan industry, saying it is not in the public interest to do so.

"Public prosecutions concluded that while there was a reasonable prospect of conviction in regards to some of the potential offences identified by the police, the prosecution of those offences was not in the public interest," the Department of Justice and Public Safety said in a statement emailed to CBC News.

In December 2013, the Royal Newfoundland Constabulary and Royal Canadian Mounted Police wrapped up a lengthy probe of potentially-criminal payday loan rates in Newfoundland and Labrador.

That police investigation dated back to at least 2010. The findings were forwarded to provincial prosecutors for review.

• Police payday loan probe spans at least 3 years

In making the decision not to proceed with charges, prosecutors say they took a number of public interest factors into account, including:

• the seriousness or triviality of the alleged offence;  
• the degree of staleness of the alleged offence; 
• the accused's alleged degree of responsibility for the offence; 
• the availability and appropriateness of alternatives to prosecution; 
• the prevalence of the alleged offence in the community and the need for general and specific deterrence; 
• whether the alleged offence is of considerable public concern; 
• the attitude of the victim of the alleged offence to a prosecution; 
• the likely length and expense of a trial, and the resources available to conduct the proceedings; 
• the likely sentence in the event of a conviction.

The Newfoundland and Labrador guidelines on deciding when to prosecute stress that the public interest is not the same as public opinion. 

"Public interest imports the notion of enduring public good and order," the guidelines note. "It also concerns the effect of a decision on other important public policies and institutions. Public opinion connotes a more temporary mood or collective feeling influenced by current events or circumstances."

No payday loan rules in N.L.

Unlike other provinces, there are no provincial rules governing the payday loan industry in Newfoundland and Labrador, so the federal rules over interest rates apply — a maximum charge of 60-per-cent interest annually.

Last year, the minister responsible stressed that anyone charging more than 60 per cent could be breaking the law.

“That is a matter for the police, if we get any calls at all about payday loan companies we refer them to the police,” Dan Crummell, the then-minister of Service NL, told CBC News in December 2013.

Earlier this month in the House of Assembly, the Tory government reiterated that stand.

“Payday loan companies need to comply with section 347 of the Criminal Code of Canada in order to operate in this province,” Service NL Minister Tony Cornect said in the legislature.

“This section states that it is a criminal offence to charge more than 60 per cent interest per year. This would amount to a maximum charge of $2.30 per $100 for a 14-day loan.”

Cornect was responding to a question from Liberal MHA Paul Lane, who asked the government to bring in legislation to protect consumers.

Lane referenced the story of a constituent who borrowed $600 at the beginning of the month and had to repay $900 at the end of the same month — the equivalent of a 600-per-cent interest rate, he said in the legislature.