Latest news with #ConsumerCreditBill2025
Focus Malaysia
4 days ago
- Business
- Focus Malaysia
Consumer credit law risks squeezing poorer households further, says think tank
THE Institute for Strategic Analysis and Policy Research (INSAP) has applauded recent the passing of the Consumer Credit Bill 2025 (CCB) by the Dewan Rakyat. However, its chairman Datuk Dr Pamela Yong cautioned that while the CCB is a milestone in efforts to regulate Malaysia's expanding consumer credit market, legislation alone will not resolve the structural issues pushing Malaysians, particularly the youth and informal workers, into cycles of debt. 'The Bill's introduction of a dedicated Consumer Credit Commission (CCC) to oversee previously unregulated credit providers and enhance consumer protection is a positive step,' she remarked. '(But) without wider economic reforms, this law may unintentionally tighten credit access for low- and middle-income groups already struggling with stagnant wages, high living costs and shrinking financial buffer.' As of December 2024, Malaysia's household debt stood at RM1.63 tril, representing 84.2% of GDP, which is the highest in Southeast Asia according to Bank Negara Malaysia. This reflects the growing reliance on short-term credit to cope with volatile income and essential spending, especially as the economy transitions from stable industrial jobs to more precarious service roles. At the same time, new fiscal measures such as petrol subsidy rationalisation and sales and services tax (SST) expansion have increased pressure on household budgets. The think tank went on to warn that layering new compliance costs on credit providers may inadvertently make credit more expensive or inaccessible, especially for the very groups the law intends to protect young adults, gig workers and financially excluded households. It also highlighted the importance of institutional clarity, regulatory independence and accountability for the CCC. Clear frameworks must govern leadership appointments, scope of powers and stakeholder engagement to ensure transparency and public trust. Crucially, INSAP stressed that any reform of the credit ecosystem must be matched by real structural policies that raise income security and job quality, control the cost of essential goods and services, and expand access to financial literacy and consumer rights education. 'The CCB must not become a regulatory plaster over a deeper economic wound. Without bold reforms to tackle inequality and economic insecurity, Malaysians will continue to borrow just to survive, no matter how well-regulated the system becomes,' Dr Yong added. ‒ July 25, 2025 Main image: Pexels/Anna Shvets
New Straits Times
7 days ago
- Business
- New Straits Times
Consumer Credit Bill to tackle hidden risks in BNPL, instant loans
KUALA LUMPUR: The introduction of the Consumer Credit Bill 2025 will protect Malaysians from financial risks stemming from uncontrolled credit use and unethical lending practices. The Finance Ministry said the comprehensive legislation aims to address challenges posed by the growing digital finance landscape, including hidden risks linked to instant loans and Buy Now Pay Later (BNPL) schemes. "The bill will serve as the primary law regulating all credit-related businesses and services. It will ensure fair conduct by credit providers, mandate transparency in charges, and introduce professional guidelines for debt collection and dispute resolution," it said in a statement. The ministry also said consumers facing financial hardship will also have access to assistance and advice through authorised and registered channels. "For the first time, a Consumer Credit Commission will be established to regulate service providers previously operating without direct oversight, including leasing companies, factoring firms, debt collection agencies and non-bank digital financing providers. "The commission will also streamline regulatory functions currently spread across multiple ministries and agencies under one roof, ensuring more uniform and efficient supervision of the credit industry," it added. The ministry said the bill reflects the government's long-term commitment to creating a safer and more inclusive consumer credit ecosystem, with phased implementation expected to significantly impact the country's financial landscape. Yesterday, the Dewan Rakyat passed the bill after it was tabled for its second and third readings by Deputy Finance Minister Lim Hui Ying today, and was debated by 23 lawmakers. Once gazetted, Lim said, the bill will introduce integrated regulations in phases, taking into consideration the industry's level of preparedness and the growing capacity of the Consumer Credit Commission, which will be gradually strengthened throughout each phase. She added that the commission will also assume regulatory responsibilities in stages, starting with currently unregulated credit providers, with full centralisation of oversight expected by 2031.
BusinessToday
22-07-2025
- Business
- BusinessToday
Parliament Passes Consumer Credit Bill 2025
The Consumer Credit Bill 2025 has been officially passed by Parliament, marking a major step forward in safeguarding borrowers and regulating Malaysia's rapidly growing consumer credit industry. Announcing the development, Deputy Finance Minister Lim Hui Ying said the legislation establishes a robust legal framework to oversee non-bank credit providers and curb unethical lending practices. 'With the passing of this Bill, Malaysia is reinforcing its commitment to consumer protection and financial governance. This is a vital reform to ensure fair, responsible and transparent credit practices, especially for vulnerable groups,' she said. She shared that the newly passed law will mandate licensing and regulation of all non-bank credit providers, establish the Consumer Credit Oversight Board as the central regulatory authority, standardise lending practices and consumer protection measures across the sector, and strengthen dispute resolution mechanisms for credit-related issues. Lim highlighted that the Bill was driven by increasing public concern over unregulated credit providers and rising household debt. By formalising oversight and regulation, consumer confidence will be restored and a healthier financial ecosystem can be promoted. The Bill is expected to gazetted later this year, with implementation to be done in stages. Related
Barnama
21-07-2025
- Business
- Barnama
Consumer Credit Bill 2025 Passed, Regulating Commission To Be Set Up
BUSINESS KUALA LUMPUR, July 21 (Bernama) -- The Consumer Credit Bill 2025 was passed in the Dewan Rakyat today to protect the interests of credit consumers in the country. Deputy Finance Minister Lim Hui Ying said the bill was enacted to address significant gaps in the unregulated industry, particularly businesses that target vulnerable credit consumers who are susceptible to exploitation. The bill also aims to standardise the regulatory framework in the currently diverse consumer credit landscape in Malaysia. The bill was unanimously approved after debate by 24 members of parliament. Under the Consumer Credit Act 2025, the Consumer Credit Commission (CCC) will be established to regulate credit businesses that currently operate without a licence or specific monitoring. 'The Consumer Credit Act 2025 will be framed as a master act that is complementary to existing acts under the administration of authorities, regulators and supervisors, and does not duplicate the functions or roles of existing ministries and agencies. 'This includes the Ministry of Housing and Local Government (KPKT), the Ministry of Domestic Trade and Cost of Living (KPDN), the Malaysia Cooperatives Commission, Bank Negara Malaysia (BNM) and the Securities Commission Malaysia (SC)," she said when winding up the debate. She explained that the integrated regulatory approach will be implemented in phases by taking into account the readiness of the industry and the capabilities of the CCC which will be enhanced from phase to phase. For Phase 1 preparations, she said, KPKT as the regulatory and supervisory authority will ensure that licensed money lenders comply with the aspects of credit consumer protection introduced through the act.
Malaysian Reserve
21-07-2025
- Business
- Malaysian Reserve
Consumer Credit Bill 2025 passed, regulating commission to be set up
KUALA LUMPUR — The Consumer Credit Bill 2025 was passed in the Dewan Rakyat today to protect the interests of credit consumers in the country. Deputy Finance Minister Lim Hui Ying said the bill was enacted to address significant gaps in the unregulated industry, particularly businesses that target vulnerable credit consumers who are susceptible to exploitation. The bill also aims to standardise the regulatory framework in the currently diverse consumer credit landscape in Malaysia. The bill was unanimously approved after debate by 24 members of parliament. Under the Consumer Credit Act 2025, the Consumer Credit Commission (CCC) will be established to regulate credit businesses that currently operate without a licence or specific monitoring. 'The Consumer Credit Act 2025 will be framed as a master act that is complementary to existing acts under the administration of authorities, regulators and supervisors, and does not duplicate the functions or roles of existing ministries and agencies. 'This includes the Ministry of Housing and Local Government (KPKT), the Ministry of Domestic Trade and Cost of Living (KPDN), the Malaysia Cooperatives Commission, Bank Negara Malaysia (BNM) and the Securities Commission Malaysia (SC),' she said when winding up the debate. She explained that the integrated regulatory approach will be implemented in phases by taking into account the readiness of the industry and the capabilities of the CCC which will be enhanced from phase to phase. For Phase 1 preparations, she said, KPKT as the regulatory and supervisory authority will ensure that licensed money lenders comply with the aspects of credit consumer protection introduced through the act. With the enactment of the act, KPKT will receive an additional legal mandate to regulate syariah-compliant businesses for both sectors, namely the regulation of loans with pawnshops. KPDN will also amend several provisions in the Hire Purchase Act 1967 to strengthen consumer protection and modernise existing provisions. Commenting on the maximum interest rate charged by credit businesses, Lim explained that the government will not set any interest rate cap in phase 1. 'We will not set (interest rates) in phase 1… however, we must collect data in phase 1 and 2,' she said. In phase 2, which is expected to start in 2028, the regulatory functions currently held by the KPKT and KPDN will be transferred to the CCC. This includes money lending, pawnshop business, hire purchase and credit sales activities. Meanwhile, phase 3, targeted to begin in 2031, will focus on the regulatory consolidation of all consumer financial activities under one centralised entity after a comprehensive review by the government. — BERNAMA
