Between the Criminal Code sections on extortion and break and enter is s. 347. This section makes it a criminal offence to enter into an agreement or arrangement to receive, or to receive, payments for advancing credit exceeding 60% of the total value of the credit advanced. Parliament enacted s. 347 to control loan-sharking. However, the courts have interpreted s. 347 so that commercial lawyers, who might assume the Criminal Code has little relevance to their practices, overlook this section at their and their clients' peril. Failure to consider s. 347 in structuring a loan transaction can result in criminal charges and significant civil consequences. If the courts find a transaction provides for a rate of interest exceeding 60% the borrower may have an unexpected defence to the lender's attempt to enforce their agreement. The courts may deprive a lender of some or all of its anticipated return. The lender's principal may even be at risk.

type A Practical Guide to Section 347 of the Criminal Code – Criminal Rates of Interest