Saeima tightens control over quick-credit companies

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The Saeima overwhelmingly passed amendments to the Law on Consumers’ Rights Protection at its plenary session Thursday, voting to tighten regulations over the non-bank loan sector, including a prohibition against providing quick-credits during overnight hours.

However the proposal to submit the non-bank loan sector to formal oversight by the Finance and Capital Markets Commission did not get the parliament’s support. The current supervisory state agency, the Consumer Rights Protection Agency, will continue in the role.

Saeima also passed more stringent rules limiting the interest percentage rates the quick-loan firms can apply on borrowers, as well as the total scope of credits permitted.

Harmony MP Ivars Zariņš called the amendments “the first big step towards bringing order to the field of instant loans.”

The Saeima press service announced that the amendments provide for caps of 0.55. 0.25 and 0.2% of the creditable sums.

Latvia’s Association of Borrowers head Jānis Āboliņš told Latvian Radio the amendments would foster a more responsible attitude toward consumers of quick credits.

“Thankfully, common sense has prevailed among the deputies and the massive lobbying campaign the non-bank creditors launched upon parliament didn’t work on them. I don’t think this will impact their business much at all, but it will certainly be more reasonable and responsible toward consumers,” he said.

If promulgated the amendments will enter into force on January 1, 2016.

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