CCTV Beijing, December 18 (Reporter Feng Fang) On December 18, the State Administration of Financial Supervision issued the newly revised "Measures for the Administration of Consumer Financial Companies (Draft for Comments)" (hereinafter referred to as the "Draft for Comments"), combined with the actual situation of the consumer financial company industry, to further supplement and improve the relevant content, and strengthen the connection with the current regulatory regulations.
Optimize the access policy and increase the shareholding ratio of major investors
The Consultation Paper consists of 10 chapters and 79 articles, and the revisions mainly involve optimizing access policies, highlighting hierarchical business supervision, strengthening corporate governance, strengthening risk management, focusing on the protection of consumer rights and interests, standardizing the management of cooperative institutions, and improving the market exit mechanism.
The Consultation Paper raises the entry criteria for consumer finance companies, which are mainly reflected in the following aspects: raising the standards for assets, operating income and other indicators of major investors, as well as the minimum shareholding ratio requirements, so as to encourage shareholders to actively play a supporting role and effectively assume shareholder responsibilities, increasing the shareholding ratio of investors with experience in consumer finance business management and risk control, so as to better play the compliance and risk control role of such investors, and raising the minimum registered capital requirements for consumer finance companies to enhance their risk resilience.
For example, the Consultation Paper It stipulates that the total assets of the main investors of financial institutions at the end of the most recent fiscal year shall not be less than RMB 500 billion or its equivalent in freely convertible currency, and the operating income of the main investors of non-financial enterprises in the most recent fiscal year shall not be less than RMB 60 billion or its equivalent in freely convertible currency; a consumer finance company shall have at least one investor with more than five years of experience in consumer finance business management and risk control, and the proportion of capital contribution shall not be less than one-third of the total share capital of the proposed consumer finance company; and the registered capital of a consumer finance company shall be a one-time paid-in monetary capital, with a minimum limit of RMB 1 billion or its equivalent in freely convertible currency。
It is worth noting that the Consultation Paper raises the shareholding requirement for major investors of consumer finance companies from no less than 30% to no less than 50%. The relevant person in charge of the State Administration of Financial Supervision said that there are two main considerations: First, from the perspective of regulatory practice in recent years, increasing the shareholding ratio of major investors is conducive to consolidating shareholder responsibilities, enhancing shareholders' willingness to participate in the company's operation, giving better play to the advantages of shareholder resources, and promoting shareholders to actively play a supporting role; second, it is conducive to improving the efficiency of decision-making and avoiding the problem of corporate governance failure and imbalance due to the relative dispersion of equity.
Focus more on the main responsibilities and main business, and add some regulatory indicators
In terms of business scope, the Consultation Paper has been optimized and adjusted, strengthened the supervision of business classification, and focused more on the main responsibilities and main businesses. On the one hand, it distinguishes between basic business and special business. Seven businesses, including "issuance of personal consumption loans" and "issuance of non-capital bonds", will be included in the basic business, and four businesses, including "asset securitization business", "fixed-income securities investment business" and "consumer finance-related consulting services", will be included in the special business.
On the other hand, non-main and non-essential businesses will be abolished, business hierarchical supervision will be strictly enforced, and financing channels will be appropriately broadened to enhance shareholders' liquidity support capabilities. The above-mentioned person in charge pointed out that in view of the high professionalism of insurance sales and the large number of related complaints and disputes involved, consumer finance companies basically did not carry out such business, so the business of "agency sales of insurance products related to consumer loans" was cancelled.
With regard to risk management, the Consultation Paper clarifies the regulatory requirements for credit risk, liquidity risk, operational risk, information technology risk, reputation risk management and other aspects of consumer finance companies, optimizes and adds some regulatory indicators, and improves the market exit mechanism.
According to the above-mentioned person in charge, based on the needs of risk prevention and control, consumer finance companies cooperate with financing guarantee companies, insurance companies and other institutions as a means of risk mitigation for loans. However, some consumer finance companies have long relied too much on the development of this model, relaxed the substantive review of the borrower's credit qualification level, lacked independent risk control capabilities, and also faced the risk that the guarantee company would not be able to compensate. In addition to paying the interest on the loan, the borrower also needs to pay a guarantee fee, which indirectly pushes up the overall interest rate of the loan. The Consultation Paper stipulates that the balance of the guarantee credit enhancement business of a consumer finance company shall not exceed 50% of the total loan balance of the company, and a certain period of rectification and transition will be granted in the future. In addition, consumer finance companies are required to have a leverage ratio of no less than 4% to limit blind expansion.
Establish and improve the working mechanism for consumer protection, and set up a consumer rights protection committee
In terms of protecting financial consumers and strengthening the protection of consumer rights and interests, the Consultation Paper requires that the main responsibility of consumer finance companies for consumer protection be consolidated, various mechanisms for consumer protection work should be improved, the standardized management of cooperative institutions should be strengthened, and the political and people's nature of finance should be practiced.
The above-mentioned person in charge said that consumer finance companies mainly serve long-tail customers such as low- and middle-income customers, and the "Draft for Comments" has added two special chapters of "Consumer Rights and Interests Protection" and "Management of Cooperative Institutions" to more prominently strengthen the protection of consumer rights and interests. On the one hand, the main responsibility of consumer protection of consumer finance companies should be consolidated. It is required to incorporate the protection of consumer rights and interests into corporate governance, establish and improve the consumer protection work mechanism, establish a consumer rights protection committee, improve the consumer protection information disclosure mechanism and personal information protection system, and strengthen the management of consumer suitability.
On the other hand, strengthen the restraint and management of cooperative institutions. Consumer financial companies are required to strengthen the management of the access and concentration of cooperative institutions, conduct continuous management and evaluation of cooperative institutions, clarify the prohibitive provisions of cooperative institutions, and avoid infringement of the legitimate rights and interests of consumers due to non-standard collection by cooperative institutions, especially collection agencies;
In addition, the Consultation Paper further strengthens the supervision of corporate governance, fully implements the regulatory regulations and institutional requirements on corporate governance, shareholder equity, related party transactions and information disclosure issued by the State Administration of Financial Supervision in recent years, and clarifies the regulatory requirements for party building, "three committees and one layer", shareholder obligations, remuneration management, related party transactions and information disclosure in combination with the organizational form and shareholding structure of consumer finance companies.
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