The Government of Malaysia is working on the formulation of a Consumer Credit Act with the Ministry of Finance leading this initiative.
A consultation paper was issued by the Consumer Credit Oversight Board Task Force on 4 August 2022 for public feedback by 5 September 2022 on a proposed framework for regulating the conduct of entities carrying out the business of providing credit or credit services to consumers, with an immediate focus on those that are not currently subject to direct regulation by any authority.
Pursuant to the consultation paper, the proposed Consumer Credit Act:
- will provide for an authorisation framework for, among others, non-bank factoring and leasing companies, impaired loan buyers, debt collection agencies and Buy Now Pay Later companies.
- will provide a comprehensive and consistent framework for credit consumer protection through the imposition of minimum standards of conduct on credit providers and credit service providers.
- will provide for the establishment of a Consumer Credit Oversight Board as a new independent competent authority for consumer credit.
- defines a “credit consumer” for the purposes of the Consumer Credit Act as:
− an individual who obtains, has obtained, or intends to obtain, credit from a credit provider, wholly or predominantly for personal, domestic or household purposes;
− a person who is a small or micro enterprise who obtains, has obtained, or intends to obtain credit from a credit provider, not exceeding an amount of RM500,000;
− any other person or class, category or description of person as may be prescribed by the Minister; or
− an individual who acts as a guarantor, not for the purpose of making profit, to a credit consumer under paragraph (a), (b) or (c) in respect of a credit agreement to which the Consumer Credit Act applies.
