KUALA LUMPUR:  Non-banking entities, credit counsellors and management agents who are currently unregulated in offering their services, will soon be subjected to the proposed Consumer Credit Act (CCA).

The act, which is scheduled to be tabled in Parliament by the end of this year, will also seek to protect consumers from non-bank credit providers and credit service providers by ensuring proper conduct, fair, efficient and transparent services.

NST yesterday reported on the emergence of intermediary groups who are preying on desperate borrowers.

These groups would put up a helpful front and promote their skills to bargain with money lenders, including loan sharks.

 In response to the NST Focus' report, the Consumer Credit Oversight Board Task Force (CCOBTF) said all credit and credit service providers would soon be required to obtain authorisation from the Consumer Credit Oversight Board (CCOB), which will be established under the CCA.

CCOBTF, which was set up in July 2021, is led by the Finance Ministry, Bank Negara Malaysia and the Securities Commission Malaysia to drive the enactment of the CCA.

"CCOB will be established under the CCA and during the first phase of its operationalisation.

"It will focus on regulating entities that are not subject to any regulations, including debt counselling and management (DMA) service, which is currently not under the purview of any regulator.

"A proper assessment will be undertaken to ascertain whether such so-called 'negotiators' are providing DMA service as defined under the CCA.

"Upon enactment of the CCA, non-bank entities carrying on the business as credit providers or credit service providers without authorisation by the CCOB will be committing an offence and may be subjected to enforcement action by the CCOB," CCOBTF said.

CCOBTF said the CCA would seek to register and licence  non-bank entities offering credit and credit counselling services.

These entities, it said, would be required to comply with minimum standards of business conduct on matters such as transparency and disclosure, fees and charges and affordability assessment.

The act would also allow for an effective surveillance, supervision and enforcement framework to deter and reprimand those involved in unfair, unethical and predatory practices.

Also part of the effort to enact the CCA were the Domestic Trade and Consumer Affairs Ministry, Housing and Local Government Ministry, Entrepreneur and Cooperatives Development Ministry and the Malaysia Co-operative Securities Commission.