Banks and regulators are preparing to tighten oversight of online lenders, targeting unfair debt collection and predatory lending practices.
The central bank’s chief legal officer highlighted that, once full regulatory authority is assumed, the first priority will be to address these abusive practices.
A technical working group has been reviewing all relevant laws that govern debt collection by lending companies, seeking to identify gaps and necessary updates.
Existing fines for unfair collection tactics are already in place, and new rules set higher capital requirements for firms operating multiple digital lending platforms.
Legislators have been urged to transfer the oversight of online lenders from the securities regulator to the central bank, a move that the securities regulator has publicly supported.
Discussions continue because two special laws currently grant the securities regulator direct authority over nonbank lenders, creating a regulatory bottleneck for the central bank.
The Financing Company Act and the Lending Company Regulation Act are the statutes that define the securities regulator’s jurisdiction over these firms.
While the central bank’s charter gives it jurisdiction over credit‑granting entities, it lacks specific mechanisms to regulate online lending platforms.
Both regulators are exploring interim measures that can be implemented without new legislation, while keeping the option of a congressional amendment to the existing laws.
The digital finance industry association has voiced support for the transfer, arguing it would strengthen regulation of the sector.
A moratorium that had halted the registration of new online lending platforms ended on August 1, allowing firms to launch new digital lending services.
Online lending platforms are defined as borrower‑facing digital interfaces used for loan applications, credit evaluation, and repayment processing.
New regulations cap the number of platforms a single financial firm may own at five and require higher paid‑up capital based on that number.
These reforms aim to enhance consumer protection and improve regulatory oversight of the growing online lending market.
