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2nd Session, 35th Parliament, 45-46 Elizabeth II, 1996-97
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The House of Commons of Canada
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BILL C-402 |
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An Act to provide for the limitation of interest
rates in relation to credit cards issued by
financial institutions, companies
engaged in retail trade and petroleum
companies
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SHORT TITLE |
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| Short title
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1. This Act may be cited as the Credit Card
Interest Limitation Act.
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DEFINITIONS |
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| Interpreta- tion
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2. The definitions in this section apply in
this Act.
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| ``Bank of
Canada
discount rate'' « taux d'escompte de la Banque du Canada »
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``Bank of Canada discount rate'' means such
minimum rate of interest at which the Bank
of Canada is willing to make loans or
advances as is determined the first day of
each month by using the average rate in
force for the previous month.
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| ``company
engaged in
retail trade'' « compagnie qui fait de la vente au détail »
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``company engaged in retail trade'' means a
company specializing in the retail trade of
non-food products other than petroleum or
gas products.
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| ``credit card'' « carte de crédit »
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``credit card'' means any card, plate, coupon
book or other device issued or otherwise
distributed for the purpose of being used
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| ``financial
institution'' « institution financière »
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``financial institution'' includes a bank to
which the Bank Act applies, a credit union,
a caisse populaire or any other cooperative
credit society, a company to which the Trust
and Loan Companies Act applies and any
institution designated by the Governor in
Council.
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| ``interest
rate'' « taux d'intérêt »
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``interest rate'' does not include fees payable
for the use of a credit card, administration
costs payable for the use of a credit card, or
entry fees or renewal fees related to an
agreement to use a credit card.
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| ``petroleum
company'' « compagnie pétrolière »
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``petroleum company'' means a company
engaged in the retail trade of petroleum or
gas products.
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LIMITATION OF INTEREST RATE |
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| Limitation of
interest rate
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3. No financial institution that charges or
stipulates entry fees, user fees or renewal fees
in relation to the use of a credit card issued by
it shall charge or stipulate in relation thereto
an annual interest rate exceeding by more than
six and one-half per cent the Bank of Canada
discount rate.
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| Limitation of
interest rate
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4. A financial institution that does not
charge or stipulate entry fees, user fees or
renewal fees in relation to the use of a credit
card issued by it shall not charge or stipulate
in relation thereto an annual interest rate
exceeding by more than eight and one-half per
cent the Bank of Canada discount rate.
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| Limitation of
interest rate
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5. No petroleum company shall charge or
stipulate, in relation to the use of a credit card
issued by it, an annual interest rate exceeding
by more than nine and one-half per cent the
Bank of Canada discount rate.
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| Limitation of
interest rate
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6. No company engaged in retail trade shall
charge or stipulate, in relation to the use of a
credit card issued by it, an annual interest rate
exceeding by more than eleven and one-half
per cent the Bank of Canada discount rate on
any unpaid monthly balance exceeding four
hundred dollars.
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INFORMATION |
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| Obligation
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7. A financial institution, petroleum
company or company engaged in retail trade
shall, within the first five days of every
quarter, in such form and manner and subject
to such conditions as are prescribed by
regulation, provide the Minister of Industry
with information on the interest rate
applicable to any credit card issued by it.
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CALCULATION OF INTEREST |
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| Calculation of
interest
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8. (1) Subject to subsection (2), interest on
a credit card account shall be calculated as of
the statement date and only on the amount, if
any, by which the balance shown on the
previous statement exceeds the amount paid
on or before the due date shown on that
previous statement.
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| Exception
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(2) Subsection (1) does not apply where a
credit card is
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| Definition of
``due date''
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(3) For the purposes of this section, ``due
date'' means the date on which a payment falls
due.
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OFFENCE AND PUNISHMENT |
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| Offence and
punishment
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9. Every person who contravenes any of
sections 3 to 6 or section 8 is guilty of an
offence and liable
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| Continuous
offence
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10. Every one who contravenes section 7 is
guilty of an offence and liable, on summary
conviction, to a fine not exceeding five
thousand dollars.
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| Separate
offence
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11. Where an offence is committed or
continued on more than one day, it shall be
deemed to be a separate offence for each day
on which the offence is committed or
continued.
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REGULATIONS |
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| Regulations
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12. The Governor in Council may make
regulations
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REVIEW |
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| Review
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13. (1) On the expiration of four years after
the coming into force of this Act and every two
years thereafter, the provisions contained
herein shall be referred to such committee of
the House of Commons, of the Senate or of
both Houses of Parliament as may be
designated or established by Parliament for
that purpose.
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| Report
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(2) The committee designated or
established for the purpose of subsection (1)
shall, as soon as practicable, undertake a
comprehensive review of the provisions and
operation of this Act and shall, within one year
after the review is undertaken or within such
further time as the House of Commons may
authorize, submit a report to each House of
Parliament thereon including such
recommendations pertaining to the
continuation of those sections and changes
required therein as the committee may wish to
make.
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COMING INTO FORCE |
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| Coming into
force
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14. This Act shall come into force six
months after the date it is assented to.
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