Promote responsible borrowing
In order to implement internationally recognized standards of good practice and to promote responsible borrowing in the non-bank lending sector, the Association of Non-Bank Lenders has established a system that allows a borrower to apply for a fixed-term loan application by application. Such request will be irrevocable and will remain in effect for one, two or three years at the option of the borrower. The new order will take effect on Monday, March 18. It will apply to the clients of the members of the association.
“Individual cases that have appeared in the media in recent weeks strongly highlight the problem that non-bank lenders do not have a single register of other customer obligations. As a result, some customers are borrowing from their own finances at the same time with several lenders,.
The new system will protect borrowers who have difficulty with their personal financial planning. The Association believes that this is a tool for the client to secure himself against bribes that are frivolous or unreasonable.
The association has developed a model application form that the borrower will have to fill out in order to be included in the waiver list. It must list the member firms of the association from which the client does not wish to obtain a loan. Also note the length of time the client wants to foreclose on the loan.
To ensure that the loan denial policy is not abused,
You will need to attach a copy of your passport to the application, which states that the copy is for submission to the Lending Association of Latvia’s Banks. In the event of suspected data abuse, the association will contact the individual to confirm that the information is accurate.
To make it easier for consumers to identify companies that have agreed to allow the borrower to foreclose on their loan list, the association’s members’ websites have a “Responsible Lender” brand recognition, which demonstrates the company’s commitment to responsible and honest business practices.
Measures to protect borrowers
It has been previously reported that members of the Association of Non-Banks Lenders have agreed on a series of measures to protect borrowers – until the state establishes a unified credit register and provides an opportunity to check income levels. Similarly, the members of the association have agreed to limit the amount of the penalty to a maximum of 100% of the principal debt, which includes both the principal and the commission for the loan.
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.