Responsibility for unlawful consumer loans, mortgages and other loans strengthens
Illegal lenders are now facing higher fines and criminal liability for the issue of consumer loans and other loans, including mortgage loans. Relevant laws developed with the engagement of the Bank of Russia are approved by the Federation Council on 2 June 2021.
Those illegal lenders who issue large-value loans (over 2.25 million rubles) and who have already been repeatedly held administratively liable for similar activities are facing criminal liability. Approved amendments to the Russian Federation Code of Administrative Offences strengthen administrative responsibility for illegal lenders. They also impose fines for a repeat offence: from 50 thousand to 200 thousand rubles for officials and individual entrepreneurs, and from 500 thousand to 2 million rubles for legal entities.
Enactment of the laws will help supress illegal lenders’ activities and reduce fraud against individuals.
The Bank of Russia warns consumers about the danger of interaction with illegal lenders and reminds them that only banks, microfinance organisations (MFOs), pawnshops, consumer credit cooperatives (CCCs), and agricultural consumer credit cooperatives (ACCCs) are authorised to issue consumer loans and other loans.
Mortgage loans and non-business related loans can be issued only by banks, CCCs, ACCCs, MFOs (with some restrictions), JSC DOM.RF and organisations authorised by it, and the Federal State Official Institute ROSVOENIPOTEKA.