In April 2021, the Financial Services Branch of the Financial Services and the Treasury Bureau (FSTB) issued a paper (FSTB Paper) to brief members of the Legislative Council Panel on Financial Affairs on the Government’s work and proposals for improving regulation of the money lending sector.
According to the FSTB Paper, in 2019 and 2020, the Companies Registry conducted 497 and 188 site inspections of licensed money lenders, and issued 271 and 102 rectification orders, as well as five warning letters in each of the two years. The Majority of non-compliance was related to advertisements and not keeping records on matters such as (a) explanations given to the borrowers of the terms and conditions of their loan agreements; and (b) borrowers’ responses as to whether they had entered into any agreements with intermediaries, the particulars of the intermediaries involved and the relationship between the money lenders and the intermediaries in the loan agreement.
As for measures implemented by the Government to refine regulation of licensed money lenders, other than the enhanced licensing conditions for licensed money lenders and two sets of new guidelines and the proposed lowering of the statutory interest rate caps, the FSTB rolled out a public education and publicity campaign in January 2020, with themes covering alertness towards money lending-related malpractices and prudent borrowing.
The FSTB Paper is accessible here.