On Dec. 23, RUS CB strengthened credit cooperatives requirements.
RUS CB strengthened requirements for consumer credit cooperatives (CCC), as the regulator noted that some credit cooperatives artificially increased issuance of loans.
Key points
The consumer credit cooperatives increased the issuance in order to circumvent the limit on the share of loans that are repaid with maternity capital in the total volume.
Moreover, such loans could be issued on non-market terms and recently, there was an uncharacteristic increase in the number of shareholders - due to the CCC activities.
As a result, RUS CB analyzed these operations of the consumer credit cooperatives and already made changes to the regulation, which will partially limit such practices.
A mechanism for promptly terminating activities of CCCs without the regulator going to court, requirements for business reputation of managers, are also provided.
This aims at strengthening protection of consumer rights/preventing unfair practices.
Effectiveness
From Feb. 2025, CCCs will be able to operate only after entering information about them into the state register.
