The Cost of Credit Disclosure Act, 2002

The Cost of Credit Disclosure Act, 2002 represents the fulfilment of Saskatchewan's obligations under the 1994 Agreement on Internal Trade between the federal government, the provinces and territories, to develop harmonized cost of credit disclosure legislation. Saskatchewan's Act is based on recommendations developed by the Uniform Law Conference of Canada for implementation nationally. 

The Act applies to almost all forms of consumer credit, including:

• consumer loans;
• leases;
• mortgages;
• lines of credit;
• credit cards; and
• credit supplied by retailers.

Lenders and retailers are required to disclose interest and borrowing costs in a meaningful, accurate and consistent manner that will allow consumers to assess and compare credit options. 

The Act protects consumers through provisions which prohibit pre-payment penalties on credit agreements (other than mortgage and farm loans or leases), and provisions which require lenders to refund a portion of certain charges when loans are repaid early. 

The legislation:

• stipulates the information that must be disclosed for each type of credit, the timing and delivery of disclosure statements, and the form of disclosure, including advertisements;
• outlines how to calculate the cost of borrowing and prepayment refunds for credit agreements/leases, and the maximum liability under residual obligation leases;
• harmonizes cost of credit disclosure legislation with other provinces across Canada;
• requires disclosure in all advertisements to be based on certain key cost elements, such as the annual percentage rate and the total cost of credit, and requires explicit disclosure of interest-free and grace periods;
• gives consumers the right to pre-pay a non-mortgage loan or lease without penalty;
• gives borrowers the right to cancel certain optional services, such as extended warranty coverage, without penalty, and to be refunded the unused premium; and
  determines a credit card holder's liability if the card is lost or stolen.