Securities Commission reminds of max rates for non-bank lenders
Consumers should be aware that there are controls in law as to what interest rates can be charged on non-bank loans.
“The Securities Commission of The Bahamas(SCB)is also the inspector of financial and corporate service providers(FCSPs),”SCB Chairman Philip Stubbs toldGuardian Business.”We’ve been designated that from 2008. FCSPs also include people who provide money lending that are not regulated by the Central Bank.”
The chairman said that recent public notices related to the calculation of the rate of interest were a reminder to FCSPs, and were also meant to inform consumers. According to Stubbs, the Rate of Interest Act(RIA)1990, Chapter 341 provides limitations on the rate of interest used in these transactions and the mode of calculation.
According to the public notice, the act stipulates that loans falling under Chapter 341 should not exceed a rate of interest of 20 percent per annum for loans of more than$100, and not more than 30%per annum on loans of$100 or less.
The provisions of the bill do not apply to Bahamian dollar loans made by banks licensed under the Banks and Trust Companies Regulation Act, 2000 or to loans made in currencies other than Bahamian dollars, the notice read.
The money lending services that non-banks may offer include salary advances, cash advances, cash loans, fast cash/fast loans, bad credit loans, debt collection, same day lending, credit extension and/or short term loans to consumers such as government employees.
The SCB invited persons suspicious of having been overcharged by a non-bank company or private individual”in the business of money lending”to contact the Commission at(242)397-4100, or by e-mail at firstname.lastname@example.org.