Credit self-limitation – Kommersant

A long-awaited bill has been submitted to the State Duma, allowing citizens to establish a ban on the issuance of loans and loans by banks and MFIs. This measure, according to experts, can become an effective means of combating fraud, but it can only come into force in the middle of next year. At the same time, market participants have questions about the procedure for installing and lifting the ban.

On Thursday, April 20, a bill was submitted to the State Duma establishing the right of citizens to impose a ban on issuing consumer loans and loans. You can set a ban immediately for all loans, and for their individual types, with the exception of mortgages and car loans. To set a ban, the borrower will have to send an application through the public services portal to all qualified credit history bureaus (CHBs).

The ban will take effect the next day, and it will be possible to remove it two days after the submission of the relevant application. If a citizen who has established a ban is given a loan, he will have every right not to repay it, and the credit institution will not be able to demand a refund.

The purpose of the bill is to prevent the practice of fraudulent receipt of consumer loans through the illegal use of personal data of citizens, as well as using social engineering methods, the explanatory note notes. The authors of the document believe that a “cooling off period” of two days for lifting the ban will eliminate the risk of fraud with the simultaneous removal of the ban and the conclusion of a consumer loan agreement. The Central Bank also considers this a sufficient period of “cooling off” so that a person can change his mind or consult with relatives, and “such a period should not be burdensome” for borrowers.

To introduce a self-prohibition on the issuance of loans, fixing this in the credit history, the Central Bank proposed back in mid-2022 (see “Kommersant” dated June 15, 2022). However, it took more than six months to develop and agree on the parameters of the bill. At the same time, according to Yevgenia Lazareva, head of the Popular Front project For the Rights of Borrowers, the number of applications from victims of fraudsters who take consumer loans or loans on behalf of citizens and without their consent almost doubled (to 19.2 thousand) over the year. “Over the past year, there has been a steady upward trend in incoming signals, and since the beginning of 2023, the trend has continued,” Ms. Lazareva notes.

Experts note the potential effectiveness of introducing such bans to combat fraud, although they are surprised by the long period of entry into force of the document – July 1, 2024. As Viktor Dostov, chairman of the Association of Electronic Money Market Participants and Money Transfers, notes, it is not difficult to place any simple operations – for example, a total ban on taking loans – in the CBI, and it is just as easy for credit organizations to check it. “More complex combinations of loan types and disbursement channels may require more time, but are also technologically simple,” he said. However, as explained in the Bank of Russia, to set up the mechanism, it is required to issue regulations, technological adjustment of public services, financial institutions, banks and MFIs. “It takes at least a year,” the regulator estimates.

But market participants have questions about the procedures. Vice-President of the Association of Banks of Russia (ADB) Alexei Voylukov points out that, “according to a number of banks, it is necessary to include quantitative restrictions in the bill, for example, entering information about a ban or its removal no more than once a week or month.” The absence of reasonable restrictions “may lead to errors in requesting information, as well as to the emergence of fraudulent schemes,” he notes. In addition, ADB proposes to limit the differentiation of prohibition conditions to a certain set of parameters. “The detailing of the terms of the ban proposed by the draft law will inevitably lead to errors due to an insufficient level of financial literacy, inattention of citizens, and will also create high risks of operational errors on the part of the banks themselves,” explains Mr. Voylukov.

Elman Mehdiyev, head of the board of SRO Mir, notes that a two-day delay in lifting the ban is a good barrier against intruders. “However, it may not be enough if, as easy as taking control of a government account, you can change the address to notify the individual himself that he has “lifted” the ban,” he points out. Much more effective, in his opinion, may be the practice of a “second key”, when certain operations can only be performed if they are authorized by a trusted person, or the inclusion of two-factor identification for access to the public services portal.

Maxim Buylov