Japan’s government has no immediate plans to relax consumer-finance regulations, Financial Services Minister Taro Aso said, days after a lawmaker said the ruling party will consider such a move.
A 2006 legislative change designed to protect consumers “was pretty effective to deal with heavily indebted people,” Aso said in response to a question from the upper house audit committee in Tokyo today. “At this point in time, the government has no intention to change the regulations.”
The Liberal Democratic Party will form a panel next month to examine whether to loosen restrictions on consumer lenders to give borrowers more options to obtain credit, LDP member Masaaki Taira said in an April 24 interview. Japan should consider scrapping part of the law that limits credit to a third of a borrower’s income, and raising a cap on interest rates to 29.2 percent from 20 percent to encourage lending, he said.
Shares of companies including Aiful Corp. (8515) and Acom Co. (8572) rose last week on speculation that the move would spur profit that has been dented by the legislation, which became fully effective in 2010 as part of a crackdown on coercive lending.
The LDP pledged to ease the regulations in its successful election campaign in 2012, saying the rules led the consumer-loan market to shrink and drove some lending underground to illegal outlets.
The panel may submit a proposal to the Diet in the current parliament session, said Taira, adding that the matter needs “careful discussion.” Previous efforts to relax the laws stalled because the LDP wasn’t in power, he said.
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