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The Internet Finance Association proposed that third-party internet platforms should not help cooperative financial institutions evade supervision through technical means.

AInvestThursday, Jul 11, 2024 4:50 am ET
2min read

July 11, 2017, the China Internet Finance Association released the "Initiative on Standardizing Financial Institutions' Delegating Third-Party Internet Platforms to Market Loans" (hereinafter referred to as the "Initiative"), saying that in recent years, a large number of financial institutions have delegated third-party internet platforms to market loans, which has improved the accessibility and convenience of credit services and promoted inclusive financial development, but there are some problems in the management of customer suitability, personal information protection and disclosure of information, etc.

In order to promote the sound development of loan marketing activities and protect the legitimate rights and interests of financial consumers, prevent the problem from continuing to spread, the China Internet Finance Association, with the approval of the financial management department, called on financial institutions and third-party internet platforms to standardize the marketing of loans.

The "Initiative" contains 19 items, including that third-party internet platforms shall not intervene or indirectly intervene in the core links of loan approval, contract signing and fund transfer; financial institutions shall continuously track and evaluate, and promptly identify, prevent and deal with the risks caused by the illegal and irregular operation of third-party internet platforms, breach of contract, failure of business and major negative public opinion; third-party internet platforms shall verify the credit rating of the loan business of financial institutions in advance; third-party internet platforms shall follow the principles of equality, voluntariness, fairness and honesty, and shall not abuse their dominant position in the market to destroy fair competition, and shall not implement monopoly and unfair competition behaviors, etc.

The "Initiative" also mentioned that third-party internet platforms shall strictly abide by the position of service providers, and shall not help financial institutions evade supervision by means of technology, and shall not illegally obtain or use the customer information and business data of financial institutions and personal information; the brand of financial institutions and loan products shall be independent of the brand of third-party internet platforms; it is encouraged to display the actual annual interest rate interval of loans in the form of upper and lower limits, and it is not appropriate to use statements such as "interest rate is low to a certain value" to mislead customers, etc.

The "Initiative" also mentioned that financial institutions and third-party internet platforms shall fully fulfill the obligations of financial consumer education and protection, guide consumers to borrow reasonably, remind consumers to carefully read the loan contract before signing, and the key terms such as loan amount, loan term, principal, actual annual interest rate, annualized comprehensive cost of funds, risk warnings, repayment and interest arrangements, overdue collection, consultation and complaint channels, and default liability shall be displayed in an accurate, easy to understand, clear and prominent manner, and measures shall be taken to sign the contract after the borrower has read all the terms.

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