THE COST OF CREDIT DISCLOSURE ACT NOW IN FORCE

Released on September 29, 2006

The Cost of Credit Disclosure Act, 2002 comes into force on October 1st, 2006.

"This legislation will protect consumers against unfair credit practices," Justice Minister Frank Quennell said. "It will ensure that consumers have accurate and comparable information to help them make better-informed credit decisions."

The Act requires lenders and retailers to disclose interest and other borrowing costs in an accurate and consistent manner. This will help consumers assess and compare credit options. It also protects consumers by prohibiting certain finance charges and penalties on prepayment of most consumer loans or leases.

The Act applies to provincially-regulated lenders, including credit unions, trust companies and leasing companies, and to retailers who offer credit to people who are borrowing for personal, family or household purposes. The Act also applies to individuals borrowing for farm, ranch and feedlot operations in Saskatchewan. In addition to consumer loans and retail credit, this Act also applies to mortgages, credit card transactions, leases and lines of credit.

The Act contains additional requirements about the information lenders must disclose to borrowers, both before and after the consumer enters into an agreement. It also outlines how annual percentage rates are calculated and disclosed.

The Cost of Credit Disclosure Act, 2002 fulfills Saskatchewan's commitments under the 1994 Agreement on Internal Trade, between the federal government and the provinces and territories, to develop harmonized cost of credit disclosure legislation across the country. Extensive consultations were held regarding this legislation, including with consumer groups and representatives of financial institutions, retailers and other lenders.

-30-

For More Information, Contact:

Andrew Dinsmore Justice Regina Phone: (306) 787-8606 Email: adinsmore@justice.gov.sk.ca