The ABC Bank continues to closely monitor the work of Payday Loans and regulate their activities. This time, rules have been established that microlending companies must follow when providing financial services to their clients. These canons are spelled out in a basic standard created by self-regulating organizations of Payday Loans as directed by the CRE Bank.
New rules for payday loans should improve the financial condition of borrowers. According to experts of the ABC Bank, innovations should reduce the total debt of each Payday Loan client. To do this, the new rules include such rules as the ability to take no more than ten “loans before paycheck” in one hand for 365 days. In addition, a Russian citizen will not be able to extend the loan more than seven times. Also, to make it easier for borrowers to resist the temptation to increase their total debt, a microcredit company will not be allowed to issue a loan of up to 30 days to anyone who has a similar valid contract. Thus, to take a payday loan, the borrower must fully repay the previous one.
Another new requirement will provide more information to microfinance clients. Now Payday Loans will have to provide proper information to any client who applies within 15 days from the time of application. This is intended to reduce the litigation between Payday Loans and their clients. Also, borrowers will be able to contact their lender without any intermediaries.
The new rules describe improved conditions for persons with disabilities and describe in more detail the procedure for restructuring overdue debts.
Payday Loans under the rules against the pressure on customers
In the new canons also, it is indicated that the Payday Loan is forbidden to put pressure on the client so that he chooses any particular service. It is forbidden to persuade the borrower to enter into an agreement on the worst conditions for the return of the initial loan, and in addition it is not possible to organize a bonus system for Payday Loan employees solely for issuing loans without taking into account their actual return.
Any Payday Loan is assigned to one of the SROs . Any consumer of payday loans will be able to go there if he believes that the company that issued the loan to him is acting illegally in relation to him. And CRE Bank ensures that SROs quickly respond to such statements and closely monitor the activities of Payday Loans.
These rules will come into force from the first day of the next month and will apply to loan agreements with individuals and legal entities.