With the amendment to the payday loan law, borrowing this type of money has become more secure. The main assumption resulting from the amendment was to increase the security of customers using online loans.
The main industry changes include the requirement of starting capital for companies that want to start their adventure on the financial market.
In accordance with legal requirements
Such a company must have a budget of USD 200,000. And according to the Act, it cannot be money that the company has obtained from a loan or other loan – an offer for Good Finance.
The most important changes that have a decisive impact on the Capital Lendering industry are the increase of the powers of the Financial Supervision Commission. From now on, this institution has the right to inspect the business and can control it, including fines resulting from deficiencies.
According to the new regulations, companies that do not want to cooperate with the PFSA may be fined financially. In this case, the fine for obstructing the operation of a public institution may amount to as much as USD 500,000.
Legal regulations for payday loans
Customers certainly waited for a change in all costs related to the loan. From now on, all costs cannot exceed 100% of the value of the loan itself, which automatically eliminated any deficiencies increasing the cost of loans to the maximum.
There has long been a problem arising from the permanent extension of the repayment of money indefinitely. Which, of course, was associated with additional costs for the customer. In this case, non-banking companies decided to work around it in a very simple way. They launched products related to installment offers. In this case, the customer knowingly determines in advance how long he can pay back the loan. What’s more, installment products allow borrowing a much larger amount and thus become more competitive to banks.
In case of any doubts, when we take our first or next payday loan, we should remember that we can always use the help of a consumer ombudsman. The helpline will explain all the most important things about borrowing money from a Capital Lender. We will also find out if a company has been removed from the business for using unlawful practices. As you can see, the amendment introduced many restrictions for Capital Lender companies that work for the benefit of the client and improve his safety.