Erd Mississauga

ERD-Express Financial Services Inc. (“ERD”) is an Alberta registered corporation based in Calgary, Alberta. ERD is engaged in the business of originating and managing a portfolio of personal loans. ERD’s target market is the Filipino community comprised of Canadian residents and contract workers. Loans are short term in nature and typically have terms of between 6 and 12 months. ERD was established on January 2012. Currently, it is operating and has offices in Calgary, Toronto, Vancouver, Edmonton, Montreal, High River, Mississauga, and Winnipeg. As noted above, the target market is the Filipino community resident in Canada typically employed as care givers, contract workers or other occupations. The borrowers have regular incomes and must have a personal chequing account at a Canadian bank. There is a large number of Filipino immigrants in Canada and all have undergone an extremely rigorous screening process before being granted admission to the country. Delinquencies are anticipated to be extremely low as these borrowers have gone through great lengths to enter the country and are working diligently to establish credit history and avoid reputational and other negative consequences of defaults. ERD also requires a co-signer for each loan. These borrowers have little or no access to credit and often have short term cash requirements. As most Filipino residents typically send a large portion of their income home, they often have short term cash needs which may include travel for family coming to Canada, medical or other emergencies back in the Philippines or other short term cash requirements. ERD will initially target the Calgary market and then expand to other cities in Alberta and then to other Canadian provinces. Loans are made at an interest rate of 3% per month or a nominal annual interest rate of 36%. A borrower will take a loan and at the same time leave ERD with void cheque or pre–authorized debit form authorizing ERD to collect their payments directly from their accounts until the loan is fully paid. For example, a borrower that borrows $1,000 for a 6 month term would, at the time of entering into the loan agreement. In this example the total amount to be repaid would be interest equal to 3% x 6 or $30 x 6 equal to $180 plus the principal of $1,000. This total of $1,180 would be repaid in twelve equal instalments of $98.33. No other fees are charged by ERD for the loan. A NSF cheque fee of $50 is charged for any cheques which are returned NSF. ERD is not a “Money Service Business” or a “Payday Loan” business. A Money Service Business is defined by FINTRAC Canada as an entity engaging in any of the following: • foreign exchange dealing; • remitting or transmitting funds by any means or through any person, entity or electronic funds transfer network; or • issuing or redeeming money orders, traveller's cheques or other similar negotiable instruments (except for cheques payable to a named person or entity). ERD is not engaged in any of these activities. A payday loan business is strictly defined as one which makes loans of less than $1,500 and for terms of less than 63 days. There are specific regulations that apply to the payday loans industry in Alberta and in most other Canadian provinces which were tailored specifically to this type of business. In particular, they are regulated as separate entities to allow them to exceed the effective interest limitations under Canadian law. Payday lenders typically charge $23 per $100 borrowed for terms as short as one week, resulting in effective annualized interest rates of over 1,000%. Section 347 of the Canadian Criminal Code, imposes a limit of 60% effective annual interest rate for loans made in Canada. Other than the interest rate limitations under Section 347 of the Canadian Criminal Code, which ERD complies with, there are no other special federal, provincial or municipal regulatory requirements for ERD to operate its business.