Criminal Code of Canada - section 347(2) - Definition of required deposit balance

section 347(2)

INTRODUCTION AND BRIEF DESCRIPTION

This section defines required deposit balance in relation to agreements or arrangements where money is required to be deposited or invested as a condition of the advance.

SECTION WORDING

347(2) In this section, "required deposit balance" means a fixed or an ascertainable amount of the money actually advanced or to be advanced under an agreement or arrangement that is required, as a condition of the agreement or arrangement, to be deposited or invested by or on behalf of the person to whom the advance is or is to be made and that may be available, in the event of his defaulting in any payment, to or for the benefit of the person who advances or is to advance the money.

EXPLANATION

Section 347(2) of the Criminal Code of Canada outlines the definition of required deposit balance" for the purpose of Section 347 of the Criminal Code. This section of the code specifically pertains to the criminal offence of predatory lending practices. It prohibits any individual or organization from charging exorbitant interest rates or fees on loans and advances made to individuals or groups of individuals who are vulnerable or facing financial hardship. In addition, the section also outlines the conditions under which the required deposit balance" may be deposited or invested by or on behalf of the person to whom the advance is or is to be made. The purpose of this requirement is to protect the financial interests of the lender or advance provider in the event of the borrower defaulting on any payment. The section also specifies the availability of the required deposit balance for the benefit of the person who advances or is to advance the money in the event of default. This means that if the borrower defaults, the lender or advance provider has the right to compensate for the loss of the investment or loan. In summary, Section 347(2) of the Criminal Code of Canada serves to protect vulnerable individuals from being subjected to predatory lending practices, while also providing lenders and advance providers with legal means to protect their financial interests. It is an important provision in ensuring fair and equitable loan practices, as well as a safeguard against fraudulent loan scheme.

COMMENTARY

Section 347(2) of the Criminal Code of Canada defines the term "required deposit balance" as a fixed or ascertainable amount of money that is actually advanced or to be advanced under an agreement or arrangement, and that must be deposited or invested as a condition of the agreement. This provision addresses the issue of predatory lending practices, where lenders may require borrowers to put up collateral or make a deposit as a condition of obtaining a loan, only to later seize these assets if the borrower defaults on their payments. By defining the required deposit balance and outlining the circumstances in which it may be used, the Criminal Code provides a measure of protection for borrowers against these types of abusive practices. At the core of section 347(2) is the concept of a deposit or investment made by or on behalf of the borrower, with the understanding that it may be made available to or for the benefit of the lender in the event of default. This deposit or investment must be a fixed or ascertainable amount, meaning that it cannot be arbitrarily set by the lender, but must be based on a clear understanding between the parties. Another key element of this definition is the requirement that the deposit or investment be made as a condition of the agreement or arrangement between the borrower and lender. This means that the lender cannot unilaterally impose a deposit requirement after the fact, but must disclose it upfront as part of the loan terms. Finally, section 347(2) specifies that the deposit or investment may only be used to benefit the lender in the event of default. This is an important safeguard against abusive practices, as it ensures that the lender cannot use these assets for other purposes or seize them unfairly. Overall, section 347(2) strikes a balance between the interests of borrowers and lenders, by providing a clear definition of the required deposit balance and outlining the circumstances in which it can be used. By doing so, it helps to prevent predatory lending practices and provides a measure of protection for vulnerable borrowers.

STRATEGY

Section 347(2) of the Criminal Code of Canada specifies the definition of the "required deposit balance" which is a fixed or an ascertainable amount of money that is deposited or invested by or on behalf of the person receiving the advance. The section further stipulates that this money may be used by the person who advances or is to advance the money in the event of default by the borrower. Understanding this section of the code is essential for financial institutions and lenders to avoid violating its provisions. One of the main considerations when dealing with this section is to ensure compliance with the statutory requirements. Financial institutions and lenders should make sure that any deposit required from the borrower is fixed or ascertainable and not a vague amount. This will ensure transparency and that the borrower understands the terms of the agreement fully. Another crucial consideration is to ensure that any investment or deposit made by the borrower is for the benefit of the borrower and not the lender. It is illegal under this section for the lender to benefit from the funds deposited by the borrower. Financial institutions and lenders should thus not use the funds for their own gain or invest it in their interests. A lender should also consider the borrower's ability to pay back the loan. This means that the borrower's circumstances should be analyzed before any deposit is required. The borrower's income and creditworthiness should be assessed, and terms agreed based on the borrower's capacity to repay the loan. This consideration will reduce the risk of default and, ultimately, the chances of a lender invoking section 347(2) of the Criminal Code. Another strategic consideration is to ensure that any terms agreed upon are reasonable and fair. The agreed upon terms regarding the required deposit balance should not be unconscionable or illegal. Additionally, there should be no coercion or pressure exerted on the borrower to accept the terms. Financial institutions and lenders should ensure that the agreement terms are in line with the regulations and laws governing the lending sector. Strategies that could be employed to comply with this section of the code include contracting the services of legal experts to interpret and explain the provisions of this section. Secondly, lenders could impose reasonable fees or interest rates based on the borrower's capacity to pay back the loan. This will reduce the probability of the borrower defaulting on the loan and minimizing the risk of forfeiting the required deposit balance. Lenders could also consider different types of securities such as insurance policies or mortgage guarantees to secure any loans issued. This approach ensures that the lender is protected in the event of default, and the borrower is not required to make a deposit under section 347(2) of the Criminal Code. Finally, lenders should ensure that all agreements are documented and signed by both parties to avoid disputes in the future. This will provide evidence of the terms agreed upon and the borrower's consent to the required deposit balance. In conclusion, lenders and financial institutions should be aware of section 347(2) of the Criminal Code and its provisions. Appropriate strategies should be employed to ensure compliance, and all terms agreed should be fair, reasonable, and transparent. It is crucial to avoid violating this section to avoid facing legal consequences that could go as far as criminal charges.