The principle of generality to the shareholders of the CPC, the registry of pawnshops: innovations in regulation of microfinance institutions

The state Duma adopted a new law clarifying the regulation of activities of microfinance institutions.

For members of credit consumer cooperatives (PDA) establishes requirements for the Association of shareholders in the CPC on the basis of territorial, social and professional principles. This measure should promote a real community of CPC members and suppress the work of unscrupulous organizations that have the legal form of a PDA including the creation of financial pyramids.

The law also specifies the procedure of holding the General meeting of members of credit consumer co-operative, the rights of its members and the powers of the Executive bodies.

In addition, the law changes the procedure for admission of pawnshops in the financial market, according to which legal work can only Lombard introduced by the Bank of Russia in the state register of pawnshops. To verify the presence of the organization in the registry will be available on the regulator’s website. Accordingly, the organization will lose the status of pawn, if the Bank of Russia will exclude it from the registry. This will improve the protection of consumers from illegal lenders posing as microfinance institutions.

According to the law, major credit consumer cooperatives and microfinance institutions will be obliged to publish detailed information about their activities on the company’s official website in the Russian domain zone.

These changes are aimed at protecting the interests of consumers of financial services, as well as to curb unfair practices in consumer lending. In addition, they allow us to harmonise legislative requirements for professional creditors.

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