FRIDAY, MAY 23, 1980
NEW MONEY LENDING LAWS
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THE GOVERNMENT IS PROPOSING NEW LAWS TO GOVERN THE LENDING OF MONEY IN HONG KONG.
THE AIM IS TO CLAMP DOWN ON LOANSHARKS, AND TO ENSURE BETTER CONSUMER PROTECTION IN ALL LOAN TRANSACTIONS BOTH AS REGARDS EXCESSIVE INTEREST RATES AND EXTORTIONATE STIPULATIONS.
THE MONEY LENDERS BILL 1980, WHICH CONTAINS PROPOSALS TO THIS EFFECT, IS PUBLISHED IN THE GOVERNMENT GAZETTE TODAY.
A GOVERNMENT SPOKESMAN EXPLAINED THAT THE BILL SEEKS TO REPEAL THE EXISTING SYSTEM OF REGISTRATION WHICH PROVIDES NO CONTROL OVER MONEY LENDERS, AND TO REPLACE IT WITH A LICENSING SCHEME WHEREBY APPLICANTS WOULD BE 'SCREENED FOR THEIR SUITABILITY TO OPERATE A MONEY LENDING BUSINESS.
UNDER THE NEW PROVISIONS, ANY PERSON WISHING TO OPERATE AS A MONEY LENDER WOULD BE REQUIRED TO APPLY TO THE REGISTRAR OF MONEY LENDERS FOR A LICENCE. APPLICATIONS WOULD BE PROCESSED BY THE REGISTRAR GENERAL'S DEPARTMENT AND DETERMINED BY A MAGISTRATE AND TWO ASSESSORS AS THE LICENSING COURT.
EXEMPTED WOULD BE BODIES SUCH AS BANKS AND OTHER REGISTERED INSTITUTIONS.
THE BILL WOULD RESTRICT MONEY LENDERS TO CARRYING ON BUSINESS IN LICENSED PREMISES ONLY, IN ACCORDANCE WITH THE CONDITIONS OF A LICENCE.
+AN APPLICANT FOR A MONEY LENDER LICENCE IS REQUIRED TO SEND A COPY OF THE APPLICATION TO THE COMMISSIONER OF POLICE WHO IS EMPOWERED TO INVESTIGATE THE MATTER, HE ADDED,
+ IF THERE ARE NO OBJECTIONS TO THE GRANT OF A LICENCE, THE COURT WILL GRANT IT WITHOUT FURTHER INQUIRY. HOWEVER, OBJECTIONS MAY BE MADE BY THE REGISTRAR OR THE POLICE OR BY ANY MEMBER OF THE PUBLIC AND IN THAT EVENT THE COURT MUST MAKE FULL INQUIRY INTO THE FITNESS OF THE APPLICANT, AND OTHER RELATED ASPECTS, BEFORE GRANTING A LICENCE.+
THE MAXIMUM EFFECTIVE RATE OF INTEREST PERMITTED BY THE BILL IN RESPECT OF ANY LOAN AGREEMENT WOULD BE 60 PER CENT, THE SPOKESMAN SAID.
AND, ANY AGREEMENT WHICH PROVIDED FOR AN EFFECTIVE RATE IN EXCESS OF THIS MAXIMUM WOULD BE UNENFORCEABLE AND THE LENDER WOULD BE LIABLE TO PROSECUTION.
+AS REGARDS PROCEEDINGS FOR THE RECOVERY OF MONEY LENT, IF THE COURT IS SATISFIED THAT THE TRANSACTION IS EXTORTIONATE WITHIN THE MEANING OF THE BILL, THE COURT MAY REOPEN THE TRANSACTION AND MAKE SUCH ADJUSTMENTS AS JUSTICE MAY REQUIRE BETWEEN THE PARTIES, HE SAID.
/+IF THE