It is always easier to sit in opposition than to govern a country, you usually say. It is easy to accuse the incumbent government of claiming that it is taking the wrong action, and in matters of agreement, it is often said that the government’s actions are not sufficient. Yes, it is easy to sit in the boat and say how to sail when you do not have to hold the helm so to speak. And this has also been the case with regard to the regulation of the sms lending industry.
The then opposition (S) thought that the then government (the Alliance) was too lax when it came to sms and put a lot of demands on how they wanted the industry to be regulated, but now that they themselves are in power We have experienced a lot of happenings at Snapmoney Finance.
Many political demands on sms loans – make decisions
January 27, 2015, almost two years ago, Malene Andress (current Finance Minister) and Veine Psalmwrote that “The government has in practice left the field open even to the most rogue companies” and reported five necessary measures that would further regulate the fast-lending industry, or as they themselves expressed it “so we want to stifle sms loans”.
So what happened to their demands now that they have sat at the helm for almost 1 ½ years? You will get the answer now.
Permission from Finance Authority
- Requirements: The Swedish Financial Supervisory Authority must be able to deny permits for lending operations to rogue players.
- Here’s how it went: The previous government was already looking at this when the debate article was written and then introduced a law that all actors wishing to conduct lending operations must first apply for permission from Finance Authority, an application that can be rejected. So it was not the current government’s merit.
Counteract impulse loans
- Requirements: Prohibition of night payouts to prevent impulse loans and drunken loans.
- Here’s how it went: There is no law on this yet, but the fact is that no lenders pay sms at night anyway, the lenders who are open the longest close at. 22:00 hours. This just goes to show how ignorant many politicians are about the fast-loan industry and that their research is often half before they hatch things. Or, Malene Andress and Veine Psalm usually get up early and think that at 22.00 is night and not evening.
Stop for sky-high interest rates
- Requirement: An interest rate ceiling of a Finnish model that will put an end to the “usury rates”.
- Here’s how it went: No roof has been introduced yet despite 15 months in power and despite an investigation into this was added in early autumn 2015, which Snapmoney Finance thinks is a bit of a shame. We look forward to introducing a reasonable loan ceiling, a loan ceiling adapted to small loans with short repayment periods.
Limited right to send cases to enforcement authority
- Requirements: Fast loan companies that have not done a thorough credit assessment should not be able to send unpaid debts to the creditor, they must owe themselves if they lend money when they should not.
- Here’s how it went: So far, rogue sms lenders can still send their debts to the bailiff.
Limited right to resell debt to debt collection.
- Requirements: The right to sell unpaid sms loans to debt collection companies must be limited.
- So it went: So far, there is no such restriction.
Yes, so far it does not seem to play a major role which government which is in power, really tight demands on sms lenders are still shining with their absence.
But certainly, we should not detract from the fact that the Swedish Consumer Agency has been granted increased powers over the past two years. Today, the Swedish Consumer Agency has the right to review the fast-loan companies and issue warnings to companies misbehaving. They can also issue sanction fees and ban businesses altogether, in addition, the rules for marketing have tightened somewhat.
But even though interest rates for sms loans have been severely criticized since 7 – 8 years ago, all Swedish lenders are still allowed to set what interest rates they want. We at Snapmoney Finance think that this is a bit of a shame because a reasonable interest rate ceiling is important if we are to get a room-clean and sensible fast-loan industry, which is really the only thing needed in addition to more detailed checks on fast-loan companies. However, the interest rate ceiling must not be too low for then the fast-loan industry is dying because the sms loans are small and the maturities are short.