The Government and Risk Day have gradually tightened legislation on lending in the form of consumer loans on smaller amounts, such as fast loans in recent years.
The most extensive regulation came into force in July 2014 and it entails far-reaching obligations for a lender to really ensure that the applicant for a quick loan can repay the loan in full in a timely manner.
The legislation provides adequate protection for us borrowers
The effects since the entry into force are clear. Among other things, it can be noted that the number of cases referred to Good Finance 2015 decreased compared with 2014 and previous years, despite an increase in lending overall.
However, in order for the legislation to have full effect, it must be complied with to the point. Unfortunately, there is a small shortcoming and the Government and Parliament will take action in a new law that is expected to come into force on June 1 this year.
Immediate stop for credit
The law on certain consumer credit operations clearly states how a lender should perform credit checks. It stipulates (together with clarifications) what will happen if the Swedish Consumer Agency, which is a regulatory authority, finds that the law is not complied with. The principle is that the Swedish Consumer Agency can prohibit a lender from continuing with the loan if deficiencies in credit control are detected. This prohibition is associated with a fine and if the lender does not rectify the deficiencies, Finansinspektionen can withdraw the permit. However, the ban only applies when the decision signed by the Consumer Agency’s DG (Consumer Ombudsman) enters into force.
From the time when the Swedish Consumer Agency makes decisions until the actual decision comes into force, consumers are relatively unprotected and the government wants to change that.
Therefore, after a quick investigation
The bill A more effective ban on non-credit testing with proposals for changes in both the Act on Certain Business with Consumer Credit and the Consumer Credit Act has been produced. The change that is made is that the Consumer Agency’s decision starts to apply immediately and as soon as the ink has dried on the decision letter, it will be prohibited for the lender to continue its business.
Should a lender continue to lend without complying with good credit practice and in violation of the Swedish Consumer Agency’s decision will soon revoke the authorization.