At present, the government’s position is that Poles should not be prohibited from using this type of financial means, but work is underway to regulate this market. What regulations are to be introduced on the market of loan companies?
Payday loan under the supervision of the Polish Financial Supervision Authority
First of all, non-bank loan companies are to be placed under the supervision of the Polish Financial Supervision Authority. This is a very good solution because the PFSA has experience and specialists who will be able to effectively supervise and control the granting of payday loans and quick loans by these companies. Thanks to this, the National Financial Supervision will be able to request access to information on loan companies. This will undoubtedly contribute to reducing the number of dishonest companies and unclear loan agreements. The PFSA will also be able to forward to the prosecutor’s office even protected information if there is a suspicion of committing a crime.
Register of payday loans companies
In order to be able to grant payday loans, loan companies will have to be entered in a special register , in order to do so, they will have to obtain the consent of the Polish Financial Supervision Authority. To obtain consent, they will have to meet a number of conditions, e.g. prove having sufficient financial capital needed for the functioning of the company, or appropriate technological facilities, as well as the appropriate qualifications of the persons managing the company. This is a reasonable postulate, thanks to which the place on the quick loans market will be only for ready companies.
Payday loans granted only by capital companies
Introducing a special legal form for companies providing payday loans – they will have to be a capital company. In addition, they will need to have a minimum initial capital. The amount is not specified, but ZFP proposes that it be min. PLN 500,000 – according to the association, this is the minimum amount needed to set up a professional loan company. This amount can be up to PLN 1 million. The postulate is correct, financial institutions should have a strong capital base.
Statistical data of loan companies
Loan companies will also need to provide periodic information about the number of loans granted, the number of outstanding loans, the number of credit applications accepted and rejected, as well as the profits or losses they have recorded on their activities.
Payday loan will be cheaper
In addition, the point that raises the most controversy is the reduction in the cost of loans to customers. At first glance, this is a very good solution for customers. However, limiting the maximum cost of the loan will also limit their availability, because the high availability of payday loans and the high risk the loan companies offset by higher fees on loans.
The proposal says that the maximum cost limit should be introduced within the 30-50% limit , alternative proposals are to introduce a variable maximum limit depending on the cost of raising capital. We believe that the second solution is more reasonable, but you need to be careful that over-regulation does not reduce the availability of payday loans, which is their biggest advantage.
In addition, loan companies will have to enter their clients into the debtors’ bases, and clients will have to agree to this.
The planned changes lead to the improvement of the quality of the non-bank loans market and to the elimination of incompetent companies and those not prepared to grant payday loans. However, you need to make changes carefully so as not to take away the sense of existence on the market.