Tougher measures against credit institutions – Göteborgs-Posten

the Investigator Johan Löfstrand has submitted its investigation on “Strengthening consumer protection in the market for högkostnadskrediter”, such as loans, to the government. Photo: Pontus Lundahl, TT

Economy the Government wants to overcome the problems related to the expensive price of an instant loan. Limits and interest rate caps are some of the measures that a government investigation is now proposing.

Those who are taking a instant loans are many times the people who do not get another loan. And the effective interest rate on the loans can be sky-high.

- It is a growing problem. Just last year we had over 60 000 orders for payment of the Enforcement office that just related to this kind of instant loans, says justice minister Morgan Johansson (S) to the TT.

Government investigators, mp Johan Löfstrand (S), has left a series of measures to strengthen consumer protection.

- the Situation today is problematic, ” he says.

“the Chilling effect”

Now it is proposed, inter alia, an interest-rate cap and a cut-off limit. The interest rate ceiling limits the borrowing rate, and interest to 40%. The cost cap means that a consumer should never be obliged to pay more than 100 percent of the loan amount in the costs of the loan.

- I hope It will get a dampening effect on lending and that we will see fewer högriskkonsumenter who gets the credit, ” says Löfstrand.

- more and More stuck in a lånefälla that you can’t take out many times with less than the state may intervene through debt restructuring in the end. This is a way to prevent, ” says Morgan Johansson.

Enhanced examination

It is also proposed that the assessment of creditworthiness is being tightened, and that the margins should be greater for borrowers when credit is granted.

- There are very tight margins in the day when granting loans. We believe that it may effect and that it will be a little more restrictive in their lending, ” says Löfstrand.

But it is not uncommon for people to have loans at several different institutions. Companies can share information to each other, but it is not a requirement. According to Jonas Löfstrand had the investigation neither the resources or the time to analyze the question.

- But we note that one would get a well-functioning credit information which they shared information it would solve many of the problems that exist in the market, ” he says.

Looked wider

Magnus Sjögren is chairman of the Swedish Konsumentkreditföretagen, the trade association for companies that offer short-term loans. He points to new legislation from the summer of 2014, if the licensing requirements of all the stakeholders, and think it would have been good if they had time to settle down so that the effects are visible before the new changes will come.

Sjögren also says that the evaluator could also look at other parts of the lending, such as fakturakrediter and hire-purchase.

- basically, we are positive that you look across konsumentkreditgivningen, but it is a pity that you stopped by to look at only snabblånemarknaden.

the Proposals will go out for consultation. The idea is that the measures will apply from 1 July 2018.

Facts: the Commission’s draft

the Inquiry, to propose a series of measures to strengthen consumer protection in the so-called högkostnadskrediter. They are loans with an effective interest rate of over 30 percent. Among other things, proposed:

A cost cap means that a borrower shall not be required to pay more than 100 percent of the amount of the credit in the costs of the loan.

An interest-rate cap that imposes a restriction of the borrowing rate and the interest rate of 40 percent.

A limitation of the possibility to extend the högkostnadskrediter.

Stricter credit assessment.

Marketing should be moderate.

Source: the study on “Strengthening consumer protection in the market for högkostnadskrediter”