If a loan document does not comply with the provision for calculating a "nominal" annual rate of interest in order to comply with section 4 of the Interest Act, then the interest rate is capped at 5% per annum. Commercial practice and appellate jurisprudence had confirmed that such provisions complied with section 4. Section 4 states:
New laws to regulate consumer loans and lines of credit that meet the definition of a “high-cost credit product” will come into effect in Manitoba on September 1, 2016. After this date, a consumer lender who offers, arranges or provides a high-cost credit product in Manitoba will be subject to licensing, disclosure, record-keeping and other requirements that are similar, in some respects, to the requirements under payday lending laws. The new laws represent a significant departure from the harmonized cost of credit disclosure laws that apply in many other jurisdictions, including Manitoba, that would otherwise apply to these types of credit products.
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