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Legal Issues concerning Consumer Finance Companies in China

On 22nd July 2009, the China Banking Regulatory Committee (CBRC) issued the Pilot Administration Measures for Consumer Finance Companies (hereinafter referred to as the Pilot Measures).
CBRC has approved bank of Beijing, Bank of China, Bank of Chengdu, and PPF Group to establish consumer finance , but there will be no consumer finance company who runs business except the four above mentioned company now at the end of June, 2012.　As the cause, it is possible that the performance after commencement of business of the four above-mentioned companies is not good.
The Pilot Measures　compose Chapter　1 General provisions, Chapter　2　Establishment, Transfer of Business, and Discontinuance, Chapter 3 Business and Management rule, Chapter 4 Supervision, and Chapter 5 Supplementary provisions.
Among the pilot projects, the person who has filed an application of consumer finance business led the way in preparing for capital, employees, business site and relevant systems, and recently submitted the application for officially opening its consumer finance company to the CBRC. The CBRC carefully examined the application in accordance with all licensing conditions of the Pilot Measures. The registered capital of this company is RMB 300million.
It is possible with expansion of a consumer finance market to also actualize a multiple debtor problem and a loan-sharking problem.
Now, in the "People's Republic of China consumer right protecting method", when dispute in which the user of consumer loan originates from consumer loan since "consumers" is not contained occurs, it is thought that the law is not applied.
However, a large number the opinion that a "financial consumer" concept should be added to the law and it should make the object of consumer protection in recent years.

→Japanese Ver.

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