Soliciting opinions on new regulations, strengthening risk prevention and consumer protection—
Credit card business will bid farewell to extensive development
Our reporter Lu Min
On December 16, the China Banking and Insurance Regulatory Commission issued the "Notice on Further Promoting the Standardized and Healthy Development of Credit Card Business (Draft for Comment)" to further strengthen the operation and management of credit card business.
Industry experts and employees of relevant financial institutions said in an interview with reporters that the "Notice" will help promote banks to transform their credit card business development methods, strengthen risk management and control, and further emphasize the protection of consumer rights, which will create a healthy, orderly, and A sustainable industry development environment plays an important role.
Fight the chaos in the industry
In recent years, the rapid development of credit card business in my country's banking financial institutions has played an important role in facilitating payment and daily consumption by the masses.
According to data released by the People's Bank of China, as of the end of the third quarter of 2021, there were 798 million credit cards and debit and credit cards in the country, and 0.57 credit cards and debit and credit cards were held per capita.
While the number of card issuances has soared, the chaos in the industry has also been criticized by all walks of life. In particular, the number of complaints from consumers over credit card over-marketing and arbitrary charges has remained high in recent years.
In the opinion of industry experts, the China Banking Regulatory Commission issued a "Notice" with a total of eight chapters and 37 articles. It adheres to the problem-oriented approach to regulate the collection of interest fees, manage excessive credit, change the development model, strengthen the protection of consumer rights, and strictly manage external cooperation. Five key points, specific and clear requirements are put forward, with strong pertinence and operability, which are very timely and necessary.
Li Jun, general manager of the Credit Card Center of China Construction Bank, believes that the issuance of the "Notice" is of great practical significance for the credit card industry to adhere to the fundamentals of financial services to the people's livelihood and residents' consumption, effectively prevent and control financial risks, and continuously promote the improvement of operating rules.
Li Jun said that as a card issuing bank serving billions of credit card customers, China Construction Bank will give full play to the exemplary effect of large state-owned banks, vigorously promote the implementation of national macro policies and various regulatory requirements in the credit card field, and insist on serving the real economy, Scientifically promote residents' consumption, resolutely promote the reasonable decline of interest rates, follow the principle of fairness to benefit the people, and at the same time actively apply scientific and technological achievements to innovate products and services under the framework of prudential supervision, and play a greater role in creating a healthy, orderly and sustainable industry development environment effect.
Promote fair and reasonable interest rates
According to the banking industry consumer complaints released by the China Banking and Insurance Regulatory Commission in the third quarter of this year, there were 44,374 complaints involving credit card business, accounting for 50.8% of the total number of complaints.
Among them, there were 14,365 complaints about the credit card business of joint-stock banks, accounting for 78.9% of the total complaints of joint-stock commercial banks.
Among them, a large number of complaints are related to unreasonable charges.
On December 16, the Consumer Insurance Bureau of the China Banking and Insurance Regulatory Commission disclosed the "Notice on the Infringement of Consumer Rights by Hua Xia Bank" that Hua Xia Bank charges an annual fee to customers who have not activated their credit card renewal, involving 28 types of credit cards; exceeding government pricing standards Debit card holders charge a handling fee for agricultural assistance withdrawals. The fee is 1.6 times the government's pricing standard, and the first monthly withdrawal business is not free as required.
The person in charge of the relevant department of the China Banking and Insurance Regulatory Commission stated that some banks have unclear disclosure of interest and fee levels, unilaterally promote low interest rates and low fee rates, charge interest in disguise in the name of handling fees, obscure the actual usage cost, and unreasonably set an excessively low bill installment starting point or There is no starting point, and the implementation of automatic installment without the customer's independent confirmation increases the difficulty for customers to accurately understand and judge the cost of credit card use, and even increases the customer's interest burden.
The "Notice" aimed at consumers' strong feedback on credit card charges, requiring banks to effectively improve the standardization and transparency of credit card interest management, demonstrating that the cost of instalment business funds use uniformly in the form of interest.
The total amount of interest and fees borne by defaulted or overdue customers shall not exceed their corresponding principal.
The minimum starting amount and the maximum amount of instalment business should be clarified, and the interest burden of customers should not be increased by inducing excessive use of instalments.
At the same time, it is clearly required that banks must continue to take effective measures to resolutely promote a reasonable decline in credit card interest rates.
Liu Jialong, party secretary of the China Merchants Bank Credit Card Center, said that the China Merchants Bank Credit Card Center will earnestly study the spirit and specific requirements of the "Notice" and actively implement them in daily operation and management.
Promote credit card business innovation under the regulatory pilot framework, promote a reasonable decline in credit card interest rates, continuously improve consumer rights protection mechanisms, and promote high-quality and sustainable development of credit card business.
Conducive to the high-quality development of the industry
After years of extensive development, the arrival of the new regulations will help further promote the credit card industry to shift to high-quality development, especially the number of cards issued is no longer a single measurement indicator.
The "Notice" specifically emphasizes that banks are required not to directly or indirectly use card issuance, number of customers, market share or market ranking as a single or main assessment indicator.
The "Notice" strengthens the dynamic monitoring and management of sleep credit cards, requiring that the number of long-term sleep credit cards that have no active customer transactions for more than 18 consecutive months and the current overdraft balance and overpayment is zero should not exceed the ratio of the institution's total card issuance at any point in time 20% (except for credit cards with additional policy functions), and it is clear that banks exceeding this ratio shall not issue new cards.
It is understood that the current situation of sleep credit cards varies greatly among banks, generally at a level of 20% to 30%, and individual banks may be even higher.
The head of the relevant department of the China Banking and Insurance Regulatory Commission said that in the future, the China Banking Regulatory Commission will dynamically lower the limit standard for the proportion of long-term sleep credit cards, and continue to urge the industry to reduce the proportion of sleep cards to a lower level.
It is worth noting that the "Notice" also set clear "traffic lights" for some credit card business innovations.
Regarding the joint card issuance business, the "Notice" clearly and strictly regulates the management of external credit card cooperation activities, requiring banks to handle the core credit card business links through self-operated online platforms, implement a unified list management system for cooperative institutions, and clearly stipulate the rights and responsibilities of both parties.
At the same time, it is clearly stipulated that the co-branded unit of the co-branded card should be a non-financial institution that provides customers with its main business services, and the content of cooperation is limited to the advertising and promotion of the co-branded unit and the rights and interests services related to its main business.
Yang Tao, director of the Payment and Clearing Research Center of the Institute of Finance of the Chinese Academy of Social Sciences, believes that the "Notice" helps all parties to grasp the "seesaw" of risks and efficiency in the development of credit card business from the following aspects: First, promote the "supply-side reform of the credit card industry" "And high-quality development.
Many banks are building new types of retail banks, and credit card business is an important part of it. Only by moving towards "fine management" and optimizing the "external cooperation ecology" can credit cards become an important support in the competition for digital transformation of banks.
The second is to help improve the "demand-side reform", better meet the diversified consumption needs of residents, and fully protect the rights and interests of consumers.
Credit cards provide residents with both payment and financing functions, and at the same time they are closely integrated with "rational consumption".
Moreover, among the participating parties, cardholders are still relatively disadvantaged subjects.
The third is to contribute to the improvement of the industry ecology. In the current ecological development of the credit card industry, the existing mechanisms and models still have shortcomings. Only by continuously improving standardization can the "soil" be continuously optimized for ecological construction and avoid various violations, The occurrence of gray and black phenomena.