The Canadian Lenders Association (CLA) supports the growth of fintech companies that are in the business of lending. We represent and advocate for over 170 companies across Canada that participate in SMB, BNPL, consumer, home, auto, and mortgage sectors.
Our members effectively and responsibly use innovative underwriting technology and business practices to address the needs of Canadians and support their ability to improve their credit rating.
The Future of Lending ™
The Canadian Lenders Association represents technology and innovative business models that continue to be adopted by mainstream financial institutions and herald the future of lending in Canada.
Our fintech ecosystem offers a dynamic suite of financial services to support the growing needs of Canadian consumers. With the acceleration of digitization, including automation and APIs, BaaS (banking-as-a-service) and Open Banking, credit has become more accessible to underserviced and digital-forward borrowers.
To this end, the CLA seeks to work across the spectrum of financial services in Canada and with the provincial and federal government to develop future standards that will ultimately benefit both the consumer and the economy.
Trust & Transparency
Consumers and small businesses look toward the fintech sector as a trusted partner to service their credit requirement. Our goal is to reinforce responsible and transparent lending practices. All member lenders are required to uphold and adhere to our certification criteria .
The CLA is a borrower-centric organization and represents the voice of the consumer and small-business owner. The success of a lending business is predicated on the performance of its loans and the satisfaction of its end customers. The CLA works to provide credit product resources and inform the consumer on how best to graduate to higher credit scores.
The CLA sees lending in Canada as a continuum from non-bank through to bank lending: there is a spectrum of risk that the market services. The goal is to nurture borrowers towards more cost-effective loans as they build their credit score through regular loan repayment. The entire market benefits when all Canadians have access to credit.
Regulation & The Market
Competition and innovation in the marketplace leads to a wider range of well-priced options for consumers and small businesses.
The CLA continues to actively work with government stakeholders and the credit industry to promote lending solutions that help borrowers meet their financial needs through affordable credit. Innovative underwriting allows for risk-based pricing to all Canadian regardless of their credit rating. We work with regulators to allow for a safe marketplace that provides affordable loans to millions of qualified borrowers and ensure a level playing field across all bank and non-bank financial services.
Focusing on APRs can jeopardize access to credit for higher risk borrowers. The CLAs goal is to make sure all Canadian can source safe and well-priced credit and are not forced into unsustainable payday lending options. Installment lending benefit consumers while still being subject to regulation under the consumer protection regime. These products should not be stifled by being inadvertently subject to payday lending legislation.
Access to Credit
Open access to credit is a key principle of the CLA. Over 8.6 million Canadians are unable to walk into their local bank to access credit. The fintech lending community offers affordable credit to both prime and non-prime consumers. Across Canada and across the globe, the fintech lending sector plays an invaluable role in expanding access to credit products.
Many of our lenders offer loans to individuals who are new to credit, have little credit history or are temporarily going through difficulties financially but are likely to repay their debts. Our lenders seek to provide credit to “invisible primes” that can be found in our fast-changing workforce, that include gig drivers, influencers and an army of Zoom-based workers.
Constraining access to capital for Canadian consumers does not eliminate the consumer’s capital needs. Restricting credit to segments of the non-prime consumer population by reducing the APR cap will result in individuals becoming stranded with nowhere to turn to for their credit needs.