Establish a proportionate regulatory framework
In order to establish a proportionate regulatory framework for the non-bank lending industry that would protect borrowers from unfair practices and at the same time not create risks for the sector’s entry into the gray area, the Banking Association calls on the Ministry of Economics and MPs to develop a separate regulation.
“Last year, about 175,000 Latvian residents used non-bank loans, which clearly shows the demand for this financial service. By imposing disproportionate regulation, companies in the sector may enter the gray area, which will further expose them to the risk of consumer infringement. A number of problems are already being caused by unlicensed companies. To address this issue, members of the association are calling for a separate law that will allow the industry to thrive while strengthening the borrower protection mechanism, ”says the association’s chief executive.
Believe that the new law should regulate
Members of the Association of Non-Bank Lenders believe that the new law should regulate the legal basis for non-bank lenders, licensing and oversight arrangements, data protection controls, a service-specific solvency assessment mechanism, consumer information arrangements, and other industry-related issues, including for unlicensed activity.
“The existing dialogue with the country gives the feeling that the issue of further development of the sector is currently being dealt with in a fragmented and hasty manner, which may be explained by the pre-election climate. Some decisions are taken by the Saeima, other issues are considered by the Ministry of Economics, and the CRPC and FCMC express their views on the sector. Non-bank lenders are calling on the country to conduct a cohesive and constructive dialogue so that the issue of the future development of the industry is dealt with comprehensively, covering all issues. A systemic approach is needed, not fragmented solutions, ”says the association’s leader.
Lenders represents companies
The Association of Non-bank Lenders represents companies with more than 80% of the total market share of the sector. The mission of the Association is to develop sound, socially responsible and long-term cooperative lending practices that are positively valued by consumers and regulatory authorities, while respecting the opportunities provided by non-bank financial solutions for the free and secure development of each individual and society