KUALA LUMPUR: A new bill which seeks to protect the interest of credit and ensure responsible lending for the credit industry have been tabled for the first reading in the Dewan Rakyat
The Consumer Credit Bill 2025 was tabled for the first reading by deputy finance minister Lim Hui Ying on Tuesday (March 4), with the second and third readings scheduled for the next meeting of the Dewan Rakyat.
The bill seeks for the establishment of a Consumer Credit Commission and protects the interests of credit consumers.
It also provides for the regulation and supervision of both conventional or Islamic credit business and credit service business and enables proper conduct and responsible lending practices in the credit industry.
The proposed law is also aiming to promote fair, efficient and transparent credit industry and to provide for other matters connected to it.
Under the proposed law, the regulatory and supervisory authority will be able to regulate and supervise credit providers who are involved in moneylending, pawnbroking, hire purchase, credit sale, buy now pay later scheme, leasing and factoring. As for Islamic credit business, this would include Islamic financing facility, Islamic pawnbroking, Islamic hire purchase, Islamic credit sale, Islamic buy now pay later scheme, Islamic leasing and Islamic factoring.
Credit business such as the Buy now pay later scheme, Leasing, Factoring, Islamic buy now pay later scheme, Islamic leasing and Islamic factoring will be licensed by the commission, while debt collection services such as impaired loan or financing acquisition, debt counselling and management will be registered with the commission.
Licensed banks and financial institutions, insurance and takaful providers, credit card and charge card and cooperatives will not be covered by this proposed law.
Under this bill, credit business’ are prohibited for featuring information that is deemed misleading, deceptive, or is likely to mislead in terms of its nature, features, terms or price of product or services offered or provided.
Aside from that, the law prohibits any act or attempts to induce consumers through advertisement, dishonestly concealing or omission of vital information on the credit product or services, exerting undue pressure influence or threats on consumers, as well as demanding payments for unsolicited credit product or services.
Clause 6 aims to provide for the establishment of a Consumer Credit Commission, while Clauses 7 and 8 provides for the functions and the powers of the commission.
Clause 7 of the bill outlines the commission’s role in promoting ethical conduct among credit providers and credit service providers, and to promote the growth of the consumer credit industry.
Meanwhile, Clause 8 grants the proposed commission regulatory powers on all matters relating to consumer credit, and the prerogative to examine the business and affairs of a credit provider and credit service provider.
The commission can impose fees on its functions, impose a monetary penalty to offenders and it can carry out investigations on matters relating to credit business or credit service business and among others.
Clause 9 of the Bill outlines the composition of the Consumer Credit Commission.
The Board of the commission shall consist of an executive chairman, a deputy executive chairman, one representative from the Finance Minister, Bank Negara Malaysia, and the Securities Commission of Malaysia, as well as not more than four members who are experienced in consumer credit matters.
According to Clause 9, the board shall be responsible for the conduct of the commission, policy objectives on the credit industry, reviewing and approving budget and strategic plan of the commission and among others.
At the same time, Clause 11 of the Bill states that all members of the Board shall be appointed for a term of three years and may be eligible for reappointment for a term not exceeding two consecutive terms.
Clause 12 also outlined conditions of appointment, where the minister may on the recommendation of the board revoke the appointment of a board member for being absent from three consecutive meetings, and among others.
Under clause 90, the Regulatory and Supervisory Authority is empowered to
investigate offences or breaches under the proposed law.
“This clause deals with the appointment of an investigating officer for the purposes of this Division. Investigating officers of the Housing and Local Government Ministry shall include a police officer unless otherwise stated. An investigating officer shall be deemed to be a public servant and public officer for the laws listed,” it said.
“Clause 109 seeks to empower a Regulatory and Supervisory Authority to institute civil proceedings against a person if there is a reasonable likelihood that the person will contravene or has contravened, or will breach or has breached or is likely to fail to comply with or has failed to comply with the proposed Act or action taken under clause 106,” it said.
