Mr. Speaker, those are very good questions.
As I indicated, given that it is for a relatively short period of time and for smaller amounts of moneys, generally speaking, we can see the effective rate of interest sometimes exceeding 1,000%. When one is talking about 10 days for $200 and being charged administrative and other fees on top of the interest rate, and when the interest rate per se cannot exceed 60%, the effective rate of course is much greater than that. That is what we are addressing.
Recognizing that in this context of short term loans the effective interest rate may be well over 60%, there needs to be some regulation to ensure that there are guidelines and regulations in place to ensure exactly what can be charged. That is where the provinces will step in. They will set those regulations. There is no specific requirement that any province set those regulations in a specific way.
In respect of what kinds of people use this, obviously all kinds of people at all kinds of income levels use it, both the middle class and those who are not as economically fortunate. One of the things a study indicated is that many of the payday loan companies recognize that their clientele comes a very short distance from where the actual offices are set up. Often we see these offices in impoverished neighbourhoods.
Judging by that, it is safe to assume that many of the clients who are utilizing these payday lenders are in fact vulnerable and impoverished people who need this kind of consumer protection legislation.