National Bank from July 1, changed the rules for collectors, pawn shops and credit unions

July 1, 2020 Ukraine will enter into force the law “On amendments to some legislative acts of Ukraine concerning improvement of the functions of the state regulation of financial services”, the so-called law on “split”.

Нацбанк с 1 июля изменил правила для коллекторов, ломбардов и кредитных союзов

As reports “Today”, this law will regulate non-Bank financial companies. Also, now their activities will be monitored by the NBU.

The new law will affect many Ukrainians – customers of pawn shops, credit unions, insurance companies. In addition, the law on “split” will regulate the activities of collectors.

Credit unions

Companies that issue loans, but also allow to place deposits. The amount of loans for people tutu small, however, to obtain them easier. According to the 2008 clients of credit unions were about 2.5 million Ukrainians. Now because of the crisis, they left about 500 thousand

The main problem with credit unions is the high interest rates and insecurity of customers.

The NBU proposes to expand the activities of such financial companies and to impose certain requirements on credit unions, compliance with which will allow you to obtain a license.

Insurance companies

To seek compensation from the insurance company in Ukraine is very difficult, and sometimes pay just a hair. The main problems of the insurance market, according to the NBU, are dishonesty and opacity, as well as the insolvency of insurance companies. Because of this, the consumers of their services are vulnerable.

NBU also plans to introduce requirements for insurance companies to increase the capitalization and to draw up a development plan. Violators of the national Bank plans to withdraw from the market.

Also in the regulator’s promise to Ukrainians to strengthen control over the “fair relationship to insured” and to reduce the number of compulsory insurance.

Pawn shops

The services of pawnshops are often people with low incomes. Sometimes these companies get stolen things, because not all items here have to provide the documents.

A minus “loans” from pawn shops is their high cost, which averages about 215% per annum excluding “penalties”.

It is the high penalties for late repayment is the main issue customers of pawnshops. Today pawn shops have a legal right to recover from debtor’s other property on account of repayment of the loan.

The Bank intends this rule to cancel. Instead, to demand from the borrower they’ll be able to only the amount not higher collateral value of things.

In addition, the regulator will monitor the observance of the rights of consumers and to grant a license only after expert evaluation of business plans.

Debt collection and factoring companies

Factoring companies – companies that buy debt obligations and the right to demand from the borrower of return of the debt.

In Ukraine, the factoring works in a non-classical version, but factoring in the traditional form represented only 20% of companies.

An example of such activities are collection companies that do not always achieve the return of the debt in a civilized manner.

The NBU plans to develop in Ukraine is a classic factoring, however, to restrict the work of the collectors will not. For such companies will be imposed rules of the market “ethical” behavior, it will have the code for the breach of which the company will be responsible.

Non-Bank leasing company

Also in the NBU plan to develop non-Bank leasing, which in Ukraine is represented only by few companies. The reason for this is the opinion of Ukrainians about the fact that leasing is available only to legal entities.

For the development of non-Bank leasing NBU is going to initiate including tax changes, which should reduce the cost of the leasing subject and also set rules, like other financial companies (for the control of solvency and honesty).

However, according to experts, even these changes will not be able to quickly make leasing popular in Ukraine.

Non-banking financial company

Such organizations engaged in lending mainly to legal entities – 78%. NBU has decided to make such services more accessible for individuals.

Non-banking financial companies issued mostly small consumer loans for up to 30 days, for a couple of months. To get such loans easier than banks, but the service can sometimes exceed 700% APR. With such financial pressure to cope is not all, therefore, the debts of Ukrainians only grow, for the repayment of debts of financial companies often use the services of collectors.

The Bank intends to establish requirements for such companies, according to which they will be obliged to provide full information on the cost of credit and the maximum amount of payments under the loan limit of 200%.

The regulator plans to make the protection of the rights of consumers of such services.