Changes in the regulation of quick loans provide for stricter rules for companies in the sector, higher capital requirements and measures against unfair practices. This was explained in “Hello, Bulgaria” by “ Progressive Bulgaria MP and member of the Budget and Finance Committee Zdravko Markov, who commented on the prepared legal changes.
He was categorical that the purpose of the changes is to protect consumers. “What we aim for with this bill is to really prevent all unfair practices in this industry“, the MP emphasized. According to him, on paper the rules look the same, but in practice consumers often pay significantly more due to various additional fees.
He also commented on the role of the annual percentage rate (APR), for which the current rules have a ceiling of 52%, but it is circumvented through fees for express service, guarantee and other additional services. “By presumption it should include everything, but in reality at the moment the law is written in such a way that it is circumvented in every way“, explained Markov.
According to the MP, it is precisely such practices that should be limited by the new rules. He assured that the proposed texts will be refined before they are finally adopted. “The loan is practically not getting more expensive, because at the moment it is actually much more expensive“, said Markov and added that the texts submitted by the Ministry of Economy will be refined so as to protect consumers.
According to him, the mechanism related to the total cost of the loan can also be changed. “We will make a working formula so that Bulgarian consumers are protected“, he assured.
Markov was also categorical that the ceiling in case of default will not be abolished. When asked whether the compensation for late payments can exceed the legal interest, he replied: “I can firmly and categorically state that not a single consumer protection is abolished“.
Among the measures discussed is a significant increase in the required capital for companies for quick loans. Currently, it is 500,000 euros, and it is being considered to be between 2 and 3 million euros. Another measure is related to the persons who can participate in the business. “One of the measures we propose is limiting the participation of persons convicted of crimes of a general nature“, said Markov, specifying that exceptions are envisaged for rehabilitated persons.
The bill is about to be considered in the parliamentary committees, and then in the plenary hall. From the MP's words, it became clear that a number of the controversial texts are to undergo additional changes and refinements before their final adoption.