The Bank of Russia wants to make it more difficult to issue online loans

The Central Bank plans to introduce regulation of the remote sale of financial products and services. Nowadays, online lending causes the greatest complaints among citizens – in terms of the imposition of additional services, the discrepancy between the real rate and the stated one, and a number of other parameters. To combat these phenomena, the Central Bank proposes to expand the set of prohibitions and restrictions for banks. Market participants recognize the relevance of the initiative, but consider it important not to go too far.

The Bank of Russia published report on approaches to regulating remote sales of financial products and services from banks and microfinance organizations (MFOs).

• According to a study conducted by the regulator, more than half of the respondents (55%) were dissatisfied with the product issued because, in particular, they did not receive complete information on the terms of the loan.
• Also, clients did not know about the registration of additional services, were dissatisfied with the final interest rate, which did not correspond to that stated in the advertisement, and with a number of other issues that accompany online loans.

Based on the results of the study, the Central Bank proposed a set of regulatory measures for discussion. Among them, in particular, is the prohibition to check in advance the borrower’s agreement with the terms of the loan, for a single agreement with the block of conditions. In addition, it is proposed to prohibit the use by creditors of misleading language and techniques that push to make a certain decision during the contract execution process. Also, the bank must arrange for the borrower to study all documents related to the loan, so that without this he cannot sign the agreement and issue additional services.

Market participants note the relevance of the document proposed by the regulator against the background of the high share of online loans in the total volume of loans.

• According to the National Financial Market Council (NFMC), on average the share of online lending has reached 80%, and for the largest players it reaches 90%.
• According to SRO MiR, in the MFO market, online issuance also accounts for about 80% of the total volume of loans.

Moneyman confirms that “a strong trend toward digitalization continues in the microfinance sector; the role of online distribution channels will only increase.” According to Andrey Ponomarev, CEO of the online financial platform Webbankir, against the backdrop of regulatory restrictions for microfinance organizations (see “Kommersant” dated October 6) some companies are trying to compensate for declining revenues by introducing additional services or hidden fees. The head of the board of SRO “MiR” Elman Mehdiyev admits that “with any tightening of regulation, creditors will always look for new sources of income.” In particular, with the introduction of restrictions on the total cost of the loan, banks began to actively offer additional services.

However, market participants emphasize that it is important not to go too far. In particular, regarding the use of misleading language. “In this case, we are not talking about reporting false information, but about some less defined, “gray” zone,” notes the head of the NSFR, Andrei Emelin. The planned ban on block consent to conditions also raises questions, since some of them are strictly interconnected. “The rate on the loan depends on whether the borrower is ready to insure himself or not, and the bank cannot allow the client to choose the minimum rate but refuse insurance,” explains the expert.

Mr. Emelin also does not understand the idea of ​​obliging the borrower, before signing the agreement, to read all the documents that are related to the provision of both the main and additional products, especially against the backdrop of a parallel, targeted simplification of the borrower’s perception of information about the loan through the individual terms of the agreement. “They contain only basic, personally significant parameters, and now returning to obliging the client to read the entire set of documents is unlikely to provide the consumer with additional protection,” explains the head of the NSFR.

Mr. Mehdiyev adds that there is now a cooling-off period (when the borrower can refuse a particular service), which is 14 calendar days and also applies to any additional services (legal support, consultations, telemedicine, etc.), if the borrower was forced to purchase them along with the conclusion of the contract.

Maxim Builov, Polina Trifonova