Debt assignment to third parties only upon borrowers’ consent: regulator clarifies
A borrower is entitled to put a ban on his/her debt assignment to third parties by the creditor. This option shall be included in the individual provisions of a consumer loan agreement. This is communicated in the Bank of Russia Information Letter addressed to banks, microfinance organisations, consumer credit cooperatives and agricultural consumer credit cooperatives.
Based on the findings of the conduct supervision, the regulator revealed instances when borrowers did not have such options or could not influence the contractual provision banning the assignment of rights (claims) to third parties despite the fact that such right is stipulated by Federal Law No.
The regulator also explains to financial institutions that the borrower’s ban on the assignment of his/her debt to third parties shall not influence the possibility to conclude a consumer loan agreement.
Moreover, individuals have a right to take an agreement away and study it thoroughly at home. The law allows to do this during five business days, including to make a decision to ban the assignment of rights to (claims on) the borrower’s debt.