The Ministry of Law saw an increasing number of unscrupulous moneylenders harassing Singaporeans before 2008. By the year we mentioned, it took steps to decrease loan shark activity in the country by introducing the Moneylenders Act.
With these steps, it identified individuals or groups who are money lenders. Then, it set tests, requirements, and regulations before allowing lenders to conduct business. The Ministry of Law manages all of SG’s moneylenders through the Registry of Moneylenders (ROM).
Working as a separate department, the Registry of Moneylenders focuses on identifying, registering, and regulating existing moneylenders in Singapore. Its goal is to inform and secure Singaporeans about legitimate moneylending practices by overseeing the activities of any businesses that engage in micro-lending practices. Here are its primary responsibilities.
Licensing Singapore’s Would-Be Moneylenders
Singapore has no shortage of individuals and groups who would want to provide Singapore money lending services. However, potential moneylenders in Singapore have to comply with the requirements, rules, and regulations of the ROM.
The Registry of Moneylenders has the power to issue licenses to individuals or parties it considers capable to become a moneylender in Singapore and follow all appointed rules and regulations.
1. Approving License Application
The Registry of Moneylenders has the sole power to approve or refuse the license application of potential money lenders Singapore has. However, it may allow high-qualified parties to receive a license to become a money lender in Singapore without examination.
As long as potential licensed moneylenders provide all needed requirements, pass their examination, and comply with the Registry of Moneylender’s requirements, they can start their moneylending business.
2. License Renewal Review Application
All licensed moneylending business undergo a license renewal process every 12 months. Alternatively, the Registry of Moneylenders has the power to lengthen or shorten the license’s validity.
All qualified moneylenders must renew their licenses a month before the license expires. If the licensed lender fails to do this, they need to apply for a new license. Once again, the Registry of Moneylenders has the capability to refuse license renewal if the requirements are incomplete or lacking.
3. Revoking Licenses
The ROM is responsible for evaluating and revoking licenses of moneylenders with proven track records of ill-intent in providing services. One basic example is any licensed lender acting like loan sharks will have their license revoked.
However, a single error that lacks intent will urge the ROM to carry out due diligence for the borrower’s claim against the offending moneylender. In these cases, the ROM may urge the lender to provide monetary compensation plus go through temporary suspension.
4. Business Location and Branch Approvals
Licensed moneylenders can own multiple branches. However, it needs to comply with the ROM’s requirements, who strictly implement the Moneylenders Act of 2008. It’s essential for applying moneylenders to bring the necessary documents and requirements to establish their new branch.
Like other regulation and approval activities it has, the ROM can reject a branch application without stating to the lender its reasons. In most cases, the lack of requirements is the primary cause of new property application failure.
Business Activity Regulation
The ROM has a separate department for evaluating all pending claims against the alleged illicit activities of legal moneylenders. Aside from consumer complaints and illegal activity reports, the ROM reviews the following information for all moneylenders.
1. Advertising and Marketing Regulations
Licensed moneylenders are a great benefit for borrowers in Singapore. However, this service can become commercialized and somehow addictive if the government leaves it unattended. The ROM oversees all communication, advertising, and marketing guideline development and implementation for all licensed moneylenders.
Additionally, it implements legal action against licensed moneylenders who fail to follow its advertising guidelines. In most cases, licensed moneylenders deal with temporary suspensions for single offenses or oversights.
2. Unsolicited Loan Enforcement
The ROM works with the Ministry of Law to evaluate reports of unsolicited loan offers, borrower harassment, and illegal changes in contract terms and conditions. Upon evaluation, the ROM must seek the guidance of MinLaw before mobilizing legal enforcement against reported loan sharks and illegal moneylending business establishments.
3. Business Advertising Evaluation
Before licensed moneylenders put up their print and digital advertising and marketing campaigns, they’ll need to explain it before an ROM representative. This Registry of Moneylenders’ representative is knowledgeable about the regulatory requirements licensed moneylenders must fulfill before pushing through their campaigns.
In a nutshell, licensed moneylenders can only advertise without outreach and extensive physical presence. We’ll discuss this in detail later.
4. Licensed Moneylender Loan Terms
All licensed moneylenders have the freedom to set their own loan terms and conditions as long as it complies with the ROM’s standard of fairness and limits. Any licensed lender that goes overboard with loan application form processing fees or interest rates they might subject to in-depth performance and licensure reviews.
5. Statement of Account Provisions
The ROM will provide licensed moneylenders their statement of accounts, from every transaction to the claims they and borrowers have reported to them. It keeps all records for later performance and licensing evaluations.
6. Evaluating Maximum and Late Interest Rates
All maximum and late interest rates for any loan amount are set in stone in the Moneylenders Act of 2008. It’s the ROM’s job to make sure no loan application form states a maximum and late interest rates above the Act’s prescriptions. In the event they discover its poor implementation, they can initiate penalties or suspensions against the offending lenders.
7. Borrower Harassment Claims
Despite enforcement and effective regulation, some in the moneylending industry can commit immense oversight. The ROM is responsible for evaluating all possible borrower harassment claims from reviewing a loan contract to coordinating with local police enforcement.
As we stated above, the ROM requires MinLaw permission to initiate and coordinate police action against illicit moneylenders.
Licensed Moneylending Services: Things To Keep in Mind
1. The Official List of Licensed Moneylenders
You can find the list of licensed lenders in the ROM’s website. It’s available in a convenient PDF file. You can trust each and every lender on the list. Plus, you can see their license numbers, addresses, and contact information if you need it.
2. Advertising Restrictions
The Moneylenders Act of 2008 prevents any licensed moneylender from using outreach and expanded print advertising practices in SG. Due to the perceived addictive and debt- spiraling tendency of fast-cash loan services, moneylenders can only advertise in print within their specified branches.
Additionally, all their digital and social media accounts marketing efforts must only maintain their presence and communicates only upon consumer demand. In short, they’re disallowed business-initiated, unsolicited conversations.
3. Loan Eligibility and Requirements
Borrowers are responsible for fulfilling all the eligibility and requirements to obtain a fast-cash loan or any loan product the lender offers. Often, these include your NRIC card
4. Interest Rate and Penalty Fee Caps
5. Loan Amount Total for Unsecured Personal Loans
Due to its unsecured nature, licensed lenders can only provide a maximum of six months’ regular wages total for their personal loans. Additionally, it requires most borrowers to have at least S $20,000 annual income to qualify.
6. Moneylender Debt Claim
If you default on your loan, the lender has every right to make a claim case against you. The Registry of Moneylenders oversees all activities involved in the process, including negotiation, arbitration, and debt consolidation.
7. Moneylender Activities: Credit Report Purchases
Truthfully, moneylenders consider your credit scores to evaluate your financial management qualities. Higher credit score means higher loanable amount and vice versa. Moneylenders check your credit report to evaluate your financial management qualities.
In doing so, they understand the errors and mishaps you faced with early bank ventures, allowing them to work with you on a smoother and stable payment plan.
Always Work With Licensed Moneylenders
It’s easy to fall into a loan shark’s trap. However, you can call the Moneylenders Credit Bureau to report the illicit organization. This department coordinates with the ROM to protect borrowers from the loan shark’s harassment practices.
To avoid troublesome ah longs, it’s best to work with ROM-licensed lenders with good reputations, such as Fortune Credit. You get the best financial services and respectful staff that will walk you through the entire process easily. Visit our website today to learn more about everything we offer.