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Heavy! Central Bank and China Banking Regulatory Commission Jointly Rectify: New Cash Loan Regulations Settled

Time: 2017-12-01         Source: First Financial         Author: First Financial

On December 1st, the Office of the Leading Group for the Specialized Renovation of Internet Financial Risks and P2P Network Loan Risk Officially issued the “Circular on Regulating and Straightening Up the “Cash Loan” Business” (hereinafter referred to as the “Notice”), with clear and unified supervision and implementation. Network micro loan rectification work.

According to the "Notice", the regulatory authority of the microfinance company suspended the approval of a new network (Internet) microloan company; the suspension of newly approved microfinance companies across provinces (autonomous regions and municipalities) to carry out microfinance business. If approval has been approved, the establishment of the business will be suspended. The approval department of a small loan company shall comply with the relevant documents of the State Council. For approved organizations that do not comply with relevant regulations, it is necessary to recheck the business qualifications.

The "Notice" also stated that the suspension of the issuance of online microfinance without specific scenarios and no specific purpose will gradually compress the existing stock business and complete rectification within a time limit. The business loan lending business qualification was not obtained according to law, and any organization or individual may not operate the lending business.

Recently, the “cash loan” business, which has no characteristics such as scenario support, no specific use, no customer group limitation, and no mortgage, has developed rapidly and has played a role in meeting the normal consumer credit demand of some groups, but excessive borrowing, repeated credit extension, Problems such as improper collection, high interest rates, and infringement of personal privacy are very prominent, and there are major financial and social risks.

The full text of the attached notification:

Circular on Regulating the "Cash Loan" Business

Leading group office for special rectification of internet financial risks in each province (autonomous region, municipality directly under the Central Government), and joint rectification office of network loan risk:

Recently, the “cash loan” business, which has no characteristics such as scenario support, no specific use, no customer group limitation, and no mortgage, has developed rapidly and has played a role in meeting the normal consumer credit demand of some groups, but excessive borrowing, repeated credit extension, Problems such as improper collection, high interest rates, and infringement of personal privacy are very prominent, and there are major financial and social risks.

In order to implement the spirit of the national financial work conference, it is based on the "People's Republic of China Banking Supervision and Administration Law," "The People's Republic of China Commercial Banking Law," "Illegal Financial Institutions and Illegal Financial Business Activities Banning Measures," "Guidance on Pilot Projects for Small Loan Companies." 》《Implementation Plan of Internet Financial Risk Special Renovation Work》 "P2P Network Loan Risk Special Renovation Implementation Plan" "Internet-based Asset Management and Cross-border Financial Services Risk Special Renovation Implementation Plan" "Network Lending Information Intermediary Agency Business Activity Management "Interim Measures" and other relevant laws, regulations, and policy documents. We hereby notify the following matters concerning the standardization and rectification of the "cash loan" business.

First, raise awareness and accurately grasp the "cash loan" business development principle

(1) Establishing financial institutions and engaging in financial activities must accept access management according to law. The business loan lending business qualification was not obtained according to law, and any organization or individual may not operate the lending business.

(2) The comprehensive cost of funds collected by various institutions in the form of interest rates and various types of fees shall comply with the provisions of the Supreme People's Court on private interest rates and prohibit the issuance or reconciliation of loans that violate the law concerning interest rate regulations. The total cost of funds collected by various agencies from the borrower should be uniformly converted to an annualized form, and all loan terms and overdue processing information should be fully and publicly disclosed beforehand to inform the borrower of the relevant risks.

(3) All types of institutions shall abide by the principle of “know your customers” and fully protect the rights and interests of financial consumers. They may not induce borrowers to excessively borrow money in any way and fall into debt traps. The borrower’s credit status, solvency, and use of loans should be comprehensively and continuously evaluated. The borrower’s appropriateness, comprehensive capital costs, loan amount ceiling, loan term, loan extension limit, “cooling-off period” requirements, and loan use restrictions should be carefully determined. Ways, etc. No loans may be granted to borrowers with no source of income. The total burden of principal and interest expenses and liabilities for a single loan shall be clearly set on the upper limit of the amount of the loans, and the number of loan extensions shall not exceed two times.

(4) All types of institutions should adhere to the principle of prudent operation and fully consider the possible impact of factors such as lack of credit records, long borrowings, and fraud on the quality of loans, strengthen internal control of risk, and prudently use the "data-driven" risk control model. Ways to hide bad assets.

(5) All types of institutions or entrusted third-party institutions shall not collect loans by way of violence, intimidation, insult, defamation or harassment.

(6) All types of organizations shall strengthen the protection of customer information security. They shall not steal or abuse customer privacy information under the name of “big data”, nor may they illegally buy or sell customer information.

II. Overall supervision and control, and the rectification of small loans on the Internet

(1) The supervision department of microfinance companies has suspended the newly approved network (Internet) microloan companies; the suspension of newly approved microfinance companies across provinces (autonomous regions and municipalities) has started the microfinance business. If approval has been approved, the establishment of the business will be suspended.

The approval department of a small loan company shall comply with the relevant documents of the State Council. For approved organizations that do not comply with relevant regulations, it is necessary to recheck the business qualifications.

(b) Strictly regulate the management of online micro loan business. Suspend the issuance of online micro-loans that are not supported by specific scenarios and have no specific purpose, gradually reduce the volume of business, and complete rectification within a time limit. Effective measures should be taken to prevent borrowers from "credit and loan" and "multiple loans". It is prohibited to issue "campus loans" and "down payment loans." It is forbidden to grant loans for speculative operations such as stocks and futures. The local financial supervision department should establish continuous and effective supervision arrangements, and the central financial supervision department will strengthen supervision.

(c) Strengthening the prudent management of funding sources for small loan companies. It is prohibited to illegally raise funds or absorb public deposits in any way. It is forbidden to sell, transfer, and disguise the company's credit assets through Internet platforms or local trading venues. It is forbidden to integrate funds through online loan information intermediary agencies. The funds integrated in the name of credit asset transfer, asset securitization, etc. shall be combined with the in-table financing. The ratio of the total financing amount to the net capital after the merger shall be temporarily enforced according to the current local ratio regulations. No further widening or disguised relaxation of micro-credits may be conducted anywhere. The proportion of the company's financial integration.

For over-provisioned micro-credit companies, a scale-down plan should be established, and the relevant ratio requirements should be met within the time limit, which should be supervised and executed by the supervision department of the micro-credit company.

The micro-credit loan rectification work of the provinces (autonomous regions and municipalities) is specifically responsible for the liquidation and rectification of micro-credit loans. The central financial supervision and administration department will formulate and issue an implementation plan for the special rectification of network micro loan risk, and further refine the relevant work requirements.

Third, step up efforts to further regulate the participation of banking financial institutions in the "cash loan" business.

(1) Banking financial institutions (including banks, trust companies, consumer finance companies, etc.) shall strictly follow the relevant regulatory and risk management requirements such as the “Interim Measures for the Management of Personal Loans” and standardize the issuance of loans.

(2) Banking financial institutions must not provide loans for institutions that do not have the qualifications for lending business in any form, and must not make loans jointly with institutions that are not qualified for lending business.

(3) Banking financial institutions that cooperate with third-party institutions to carry out loan business may not outsource core business such as credit review and risk control. "Assisted loan" business should return to its original source. Banking financial institutions must not accept non-guaranteed third party organizations to provide letter-crediting services and disguised commitments and other disguised letter-creating services. They should request and ensure that third-party cooperation agencies cannot collect interest payments from borrowers. .

(4) Banking financial institutions and their asset management products issued and managed may not directly invest or disguise their investments in (securities) securitized products sold on the basis of “cash loans”, “campus loans”, “down payment loans”, etc. other products.

Banking financial institutions participate in the standardization and rectification work of the “cash loan” business, which is carried out by the local agencies of the China Banking Regulatory Commission and the various local rectification offices.

IV. Continuously promote and improve the business management of P2P network lending information intermediary agencies

(1) It is not permitted to disguise or disguise the lending business that does not comply with the law concerning the interest rate requirement; it is forbidden to deduct interest, handling fees, management fees, security deposits, and set high overdue interest rates, late fees, penalties, etc., from the loan principal.

(2) It may not outsource the core work of customer's information collection, screening, credit evaluation, account opening and so on.

(3) It is not allowed to use the funds of banking financial institutions to participate in the P2P network lending.

(4) It is not allowed to provide lending and matching services to students who are in school, have no source of repayment, or have no ability to repay the loan. It is not allowed to provide "finance down payment", real estate off-site financing, etc. It is not allowed to provide loan-specific matching services without any specific purpose.

The joint work office on local network loan risk rectification shall, in accordance with the “Circular on the Implementation of the “Cash Loan” Business Activity Liquidation and Reorganization” (online loan rectification office letter [2017] No. 19), implement a “cash loan” for online lending information intermediary agencies. "The business will be rectified.

V. Classified disposal, increase efforts to dispose of all kinds of illegal and infraction agencies

(1) Where any agency violates the aforesaid provisions to conduct business, the various supervisory departments shall, in accordance with the seriousness of the circumstances, adopt measures such as suspending business, ordering rectification, reporting criticism, not filing, and canceling business qualifications, etc. to supervise and urge their rectification; At the same time, administrative penalties are imposed by the relevant functional departments of the provincial people's government and financial regulatory authorities according to law. For websites and platforms that assist various agencies to conduct business in violation of laws and regulations, relevant departments shall be suspended and legally investigated for liability.

(2) For organizations or individuals that have not approved the operation of a lending business, all localities shall, under the guidance of the China Banking Regulatory Commission, strictly crack down on and ban them; they shall intensify penalties and crackdowns if they take the opportunity to flee their debts and do not support the cooperation in liquidation and rectification; Suspected of illegal operations, the transfer to the relevant departments for investigation; financial institutions and non-bank payment agencies to stop providing financial services, communications management departments to dispose of Internet financial websites and mobile applications. Where illegal activities such as illegal fundraising or illegal securities are involved, they shall be investigated and dealt with in accordance with the working mechanisms such as disposing of illegal fundraising, cracking down on illegal securities activities, and clearing and rectifying various types of trading venues.

(3) promptly transfer clues to public security agencies for institutions that are suspected of malicious illicit fraud and violent collection and other serious violations of laws and regulations, effectively guard against risks, and ensure the stability of society as a whole.

Six, pay attention to implementation, pay attention to long-term effect, ensure the standardization of the work effect

(1) All localities should strengthen organizational leadership and overall coordination. The local financial supervision department should take the lead to clarify the main responsibility of the various agencies for rectification, figure out the risk base, formulate the rectification plan, and tighten the main responsibilities of the employees within the jurisdiction, and fully develop it. Clean up and rectify, and pay close attention to establishing a working mechanism that combines local responsibility and cross-regional coordination. At the same time, do a good job in contingency plans and keep the risk at the bottom line.

(2) All localities shall guide the relevant agencies within their jurisdiction to make full use of the basic database of China's financial credit information and the China Internet Finance Association's credit information sharing platform to prevent borrowers from borrowing excessively and borrowing excessively. All localities shall guide the borrower to perform its debt liquidation obligations in accordance with the law, establish open information on untrustworthy information, and jointly punish such systems, resulting in the loss of trustworthy persons everywhere and restrictions everywhere.

(3) All regions should carry out risk warning education to improve the ability of the public to identify unfair, fraudulent loan activities and illegal and illegal financial activities, and to increase risk prevention awareness.

(4) All localities shall establish a system of reporting and rewarding heavy penalties, make full use of the China Internet Finance Association reporting platform and other channels to reward informants who provide clues for violations of laws and regulations, give full play to the role of social supervision, and impose heavy penalties on violations of laws and regulations. Form an effective shock.

(5) All localities shall carry out standardization and rectification in strict accordance with the requirements of this notice. Those who lack supervisory responsibilities and implement them poorly will be held accountable.

(6) Each locality shall submit the remediation plan and monthly work progress (within five working days after the month) to the P2P Network Loan Risk Special Remedy Working Group Office (Banking Regulatory Commission), and copy the Internet Finance Risk Special Remedy Leadership Group Office (PBC). ).

Internet finance risk special rectification P2P network loan risk special rectification

Work Leading Group Office Work Leading Group Office

(Symposium of the People's Bank of Financial Market Division) (CBRC Department of Pragmatic Finance)

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