Featured Product

    BNM Publishes Consultation on Consumer Credit Act in Malaysia

    August 04, 2022

    The Bank Negara Malaysia (BNM) informed that the government of Malaysia is working on the formulation of a Consumer Credit Act. This Act will pave way for establishment of the Consumer Credit Oversight Board (CCOB) as an independent competent authority to oversee consumer credit providers and credit service providers. Comments are being sought, until September 05, 2022, on a consultation related to the Consumer Credit Act.

    This public consultation is the first of a two-part consultation. It provides an overview of the current landscape of the consumer credit industry in Malaysia, its challenges, and proposed reforms to better protect individuals and small businesses in their dealings with credit providers and credit service providers. The reforms will be implemented in phases under a proposed multi-year program to deliver consistent standards of protection for credit consumers and support the orderly development of the credit industry in Malaysia. The Consumer Credit Act seeks to provide a comprehensive framework for regulating the conduct of entities carrying out the business of providing credit or credit services to consumers, with an immediate focus on entities that are not currently subject to direct regulation by any authority; such entities include but are not limited to “Buy Now Pay Later” providers, leasing and factoring companies, impaired loan buyers, and debt collection agencies.

    The CCOB Task Force is seeking feedback on the proposed regulatory and authorization framework as well as areas that will be addressed in the legislation to promote high standards of professionalism and fair conduct of credit providers and credit service providers. This will be followed by Part 2 of the consultation paper, which is to be issued in the fourth quarter of 2022 and will outline further details on the authorization framework and the scope and focus of requirements and standards that will apply to credit providers and credit service providers.

    The transformation of the consumer credit regulatory landscape will be completed in phases. In its early stage as the competent authority, the CCOB will regulate all consumer credit activities which are currently unregulated. This will be followed by a gradual transfer of responsibilities for conduct regulation from the existing Regulatory and Supervisory Authorities (RSAs) to CCOB. The Consumer Credit Act will also facilitate Islamic credit business by non-bank credit providers by including provisions to ensure that such credit providers and its product offerings comply with Shariah principles. In Phase 2 (by 2025), the regulatory functions in respect of consumer credit activities under KPDNHEP (Ministry of Domestic Trade and Consumer Affairs) and KPKT (Ministry of Housing and Local Government) will be transferred to CCOB, while BNM, SC (Securities Commission Malaysia), and SKM (Malaysia Co-operative Societies Commission of Malaysia) will continue to serve as the RSAs for the entities under their respective purview. In Phase 3 (after 2030), further enhancements to existing structures for the conduct regulation of all financial firms in Malaysia will be considered. This may include proposals that draw from the experience of the ‘"twin peaks" approach to financial regulation.


    Related Link: Press Release



    Keywords: Asia Pacific, Malaysia, Banking, Credit Risk, Consumer Credit Act, Buy Now Pay Later, CCA, CCOB, Governance, Lending, BNM

    Related Articles

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699