According to the recommendation of Ontario's independent provincial panel, the interest payments and fees charged by payday loan companies should be limited to $21 apiece for each multiple of $100.

The panel's proposal has been hailed by the payday loan industry as well as the anti-poverty activists. It was during summer last year that the government appointed the panel, following the passage of its Payday Loans Act, which was the first shot at regulating the industry.

In the report prepared by Ernst & Young, the $21 cap announced by the panel would protect the customers along with ensuring the survival of the payday loan industry. The restriction will be especially beneficial for the characteristically low-income people, who seek payday loans after having exhausted conventional and cheaper lending alternatives.

In the opinion of Elise Aymer, member ACORN - Association of Community Organizations for Reform Now - the panel's recommendation had given Ontario a much-need regulation, after the persistent arguments against the high rates of payday loans.

However, the recommendation of the $21 cap by Ontario's payday loan advisory board has also met with criticism. Paralegal Charles Foster said that the move will be of no help to people "drowning" in debt.

Critical of the recommendation, Foster said: "There is nothing for consumers here. This will be couched as consumer protection, but we don't see it that way. This is a decriminalization of usury!"