Bunting wants more borrowers protected under Microcredit Act
Leader of Opposition Business in the Senate Peter Bunting is suggesting that provisions dealing with consumer protection in the Microcredit Act, 2021 should be widened to include banks and companies that have hire-purchase arrangements.
The Microcredit Act, 2021 will, among other things, license and regulate microcredit institutions and protect consumers from predatory lending practices. Passage of the law will also bring Jamaica in compliance with the Financial Action Task Force provisions relating to anti-money laundering and counterterrorism.
Debating the bill in the Upper House, Bunting argued that while he welcomed provisions in the proposed law to protect consumers, the measures only applied to microcredit institutions.
He said that microcredit services are provided by a range of other institutions for which the legislation will provide no consumer protection.
Bunting reasoned that consumers who acquired goods or assets through hire-purchase arrangements would not benefit from the protection in the microcredit law.
The leader of opposition business noted that banks have increasingly ventured into the micro and small segments of the market, but customers of these institutions would not enjoy the protection set out in the microcredit law.
“When we consider the balance sheet of the microlenders versus the commercial banks, we see that we are really dealing with a small fraction of the total. So we are offering protection, which is welcome, but we are offering that protection only to a small segment of those who need that protection,” he insisted.
“We want a more omnibus bill that would protect all consumers subject to deceptive lending, deceptive credit practices or predatory credit practices,” he said.
Government Senator Don Wehby recommended that the Consumer Affairs Commission publish in the newspapers the interest rates being charged by microcredit institutions. He indicated that in most instances, the borrower cannot be bothered to call several agencies to determine the best interest rate being offered, and as such, could end up paying exorbitant rates.
Wehby also recommended that the Jamaica Business Development Corporation spearhead a comprehensive training programme for people who borrow from microlenders.
The bill was passed with 12 amendments.