The financial sector in the sale of non-cash loans is becoming increasingly problematic. Such a result was not accidental. Because payday loans are much easier to get now than loans in traditional banks. First and foremost, customers do not have the hard credit rating they need to show, and many companies do not check the financial situation of the customer in the Credit Information Bureau.
However, loan companies, although at the beginning of their activity, independently set the rules of the game, have been under greater control of the Polish Financial Supervision Authority for some time. In addition, the Office of Competition and Consumer Protection is responsible for them. The more payday payments are given, the more interest the listed offices show. As a consequence, regular changes have been introduced for some time.
Lower payday costs
Until some time, the payday loans from banks were different mainly because customers did not know exactly what costs they would incur as loans. I guess you do not have to guess for too long that the talk is really very high amounts. Therefore, the Polish Financial Supervision Authority has introduced a provision regulating the interest rate. At the moment, it can not exceed four times the Lombard rate of the National Bank of Poland.
In addition, there is still a plan to cut costs charged outside interest rates. And here such a move would have a very strong impact on non-bank companies themselves. Namely, smaller companies, managing much smaller capital and at the same time focused on pure profit from borrowing costs, would disappear entirely from the financial market. But not only. The leading companies in Poland will also see a drop in profits. These include, among others, Express Cash Register or Tongabank. Could this mean the end of a career for almost 1/3 of loan companies?
The project of cost reduction
The plans include mainly the provision for non-interest costs. They should not exceed 25 percent of the total loan. At the same time, we can expect that in each subsequent year we will only be credited with 30 percent of the full payout taken.
Another suggestion is to add all costs of a payday in a period of 120 days, or 4 months. Therefore, if the client extends the loan repayment period, it will continue to be in force as in the case of repayment. It is not to be concealed that currently it is the highest non-bank revenue ratio for the time being. Some of them even amount to 50 to 200 zlotys for sending a reminder with a reminder of repayment of the loan. And after the project comes into effect, it will be a decidedly high amount.
According to the planned laws, consumers will be protected. But unfortunately, many non-bank companies in this respect will most likely have to close their operations. So far, no final decision has been made whether the project will come into force or only stay at the planning stage.
Office of Competition and Consumer Protection
Dunkor is beginning to become more and more interested in what costs are charged by non-bank loans. For the time being, the activity of this institution was limited to contacts between companies and consumers who could not resolve disputes on their own. But there are many indications that it will soon be in charge of all matters related to loan companies. In this way, the Financial Supervision Authority could make up for its arrears.