section 347(2)

INTRODUCTION AND BRIEF DESCRIPTION

This section of the Criminal Code of Canada defines credit advanced in the context of agreements or arrangements involving money, goods, services or benefits.

SECTION WORDING

347(2) In this section, "credit advanced" means the aggregate of the money and the monetary value of any goods, services or benefits actually advanced or to be advanced under an agreement or arrangement minus the aggregate of any required deposit balance and any fee, fine, penalty, commission and other similar charge or expense directly or indirectly incurred under the original or any collateral agreement or arrangement.

EXPLANATION

Section 347(2) of the Criminal Code of Canada defines the term credit advanced" in the context of section 347 of the Code. This section deals with criminal interest rates, which is when a lender charges an interest rate over 60% per annum on a loan or credit agreement. Criminal interest rates are prohibited in Canada and punishable by imprisonment for up to five years. The term credit advanced" is used in section 347 to describe the amount of money or value of goods, services, or benefits that are advanced or to be advanced under a credit agreement. This means that any fees, fines, penalties, commissions, or other similar charges incurred under the original or any collateral agreement or arrangement are subtracted from the amount of credit advanced. The purpose of this definition is to determine whether a lender is charging a criminal interest rate on a credit agreement. If the lender is charging an interest rate that exceeds 60% per annum on the credit advanced, then they are in violation of section 347 of the Criminal Code. In summary, section 347(2) of the Criminal Code of Canada provides a clear definition of what constitutes credit advanced" in the context of criminal interest rates. This definition is crucial in determining whether a lender is charging an illegal interest rate and helps to protect consumers from being exploited by lenders.

COMMENTARY

Section 347(2) of the Criminal Code of Canada provides a definition for the term "credit advanced" in relation to the criminal offence of extortionate credit transactions. This provision is important for several reasons, including the fact that it clarifies what types of transactions are covered by the offence and how the value of those transactions should be calculated. At its core, the offence of extortionate credit transactions involves a lender taking advantage of a borrower's vulnerable economic situation by charging exorbitant interest rates or fees in exchange for credit. The goal of this offence is to prevent lenders from exploiting borrowers and to ensure that credit transactions are conducted fairly and transparently. One of the key elements of the offence is the concept of "credit advanced". This term refers to the total value of the money, goods, services, or benefits that have been or will be advanced to the borrower under the agreement or arrangement in question. In other words, it represents the total value of the credit transaction. However, this total value is subject to certain deductions. Specifically, any required deposit balance and any fees, fines, penalties, commissions, or other similar charges or expenses that are directly or indirectly incurred as part of the original or collateral agreement or arrangement are deducted from the total value of the credit advanced. This deduction helps to ensure that the final amount charged to the borrower is reasonable and reflects the actual value of the credit provided. One of the challenges with this provision is that it requires lenders and borrowers to carefully track all of the various fees, charges, and expenses that are associated with a particular credit transaction. This can be difficult, especially in cases where there are multiple agreements or collateral arrangements involved. Additionally, it can be challenging to determine whether certain charges or expenses should be considered "similar" to those explicitly listed in the provision. Another issue that arises with this provision is the potential for lenders to manipulate the calculation of credit advanced to avoid liability for extortionate credit transactions. For example, a lender might structure a loan in such a way that the required deposit balance or collateral charges are exorbitant, thereby reducing the value of the credit advanced and making it appear more reasonable. This highlights the need for careful scrutiny of all aspects of credit transactions to ensure that they are fair and transparent. Overall, section 347(2) of the Criminal Code of Canada plays an important role in clarifying the scope and calculation of the offence of extortionate credit transactions. While it presents some challenges and potential loopholes, its intent is to protect vulnerable borrowers from unscrupulous lenders and promote fairness in the credit market.

STRATEGY

Section 347(2) of the Criminal Code of Canada is critical for the protection of consumers from predatory lending practices. It is essential to understand and comply with this section as any violation can lead to criminal charges and penalties. As such, there are several strategic considerations when dealing with this section: 1. Comply with the Law: The first and foremost consideration is to comply with Section 347(2) of the Criminal Code of Canada fully. It is essential to understand the definition of credit advanced" and all the terms and conditions related to lending, borrowing, and repayments under any agreement or arrangement. Ignorance of the law is not an excuse and can result in severe legal consequences. 2. Avoid Unfair Lending Practices: Unfair lending practices such as predatory lending can violate the Criminal Code of Canada and lead to criminal charges. Lenders should avoid charging high-interest rates, hidden fees, penalties, and other charges that may not be explicitly mentioned in the agreement or arrangement. Borrowers should be given clear information about all the terms and conditions of the agreement, including the interest rate, repayment schedule, penalties for late payments, and any other charges. 3. Consult a Legal Expert: It is advisable to consult a legal expert before entering into any agreement or arrangement that involves lending or borrowing. This can help both lenders and borrowers to understand their legal rights and obligations, clarify any doubts, and ensure that no criminal code violations occur. 4. Maintain Proper Documentation: Lenders and borrowers should maintain proper documentation of the agreement or arrangement, including the amount of credit advanced, the terms and conditions of lending and borrowing, the repayment schedule, and any other charges or expenses. Proper documentation can help to avoid any disputes or legal issues in the future. 5. Respond to Complaints: Any complaints from borrowers related to unfair lending practices or violation of the Criminal Code of Canada should be taken very seriously. Lenders should investigate such complaints and respond promptly and adequately. Ignoring or dismissing such complaints can lead to legal problems in the future. In conclusion, compliance with Section 347(2) of the Criminal Code of Canada is vital for lenders and borrowers to avoid criminal charges and penalties. Employing strategies such as avoiding unfair lending practices, consulting legal experts, maintaining proper documentation, and responding to complaints can help to ensure compliance with this section and protect the rights of consumers.