11-09-2013, 05:18 PM
Belated proposal, should be done earlier...
MAS to roll out changes on credit card, unsecured credit rules
SINGAPORE — From Dec 1, the Monetary Authority of Singapore (MAS) will roll out changes to rules on credit card and unsecured credit.
The MAS said the changes are aimed at improving lending practices by financial institutions and enabling individuals to make better borrowing decisions.
The key policy changes, according to MAS, are:
(a) Financial institutions will be required to review a borrower’s total debt and credit limits before granting a new credit card or unsecured credit facility, or increasing the credit limit on such facilities. This is to enable a more realistic assessment of an individual’s borrowing capacity.
(b) Financial institutions will be required to disclose to individuals who roll over their credit card debts and revolving credit facilities the potential cost of doing so and how the debt will accumulate. This will help borrowers make more informed credit decisions, taking into account the total cost of borrowing.
© Financial institutions will be required to obtain a borrower’s express consent for the amount of each credit limit increase. This will ensure that credit limit increases are not extended to borrowers unless they agree to such increases.
(d) Financial institutions will not be allowed to grant further unsecured credit to individuals whose unsecured debts with those financial institutions are more than 60 days past due, until all past due amounts are paid. Other financial institutions will also not be allowed to grant new cards and unsecured credit facilities or increase credit limits on existing facilities. This will help individuals who already have difficulties repaying their existing debt avoid getting into further debt problems.
(e) Financial institutions will not be allowed to grant further unsecured credit to individuals whose aggregate interest-bearing outstanding unsecured borrowings across all financial institutions exceed 12 months of their income for 90 days or more. This includes not being able to charge further amounts to all existing unsecured cards and unsecured credit facilities. Financial institutions will also not be allowed to grant new unsecured cards and unsecured credit facilities. This will help individuals who have already accumulated high levels of debt through credit cards and unsecured credit avoid accumulating further debt,
The MAS said the proposals will be implemented in stages.
Borrowers will have a transition period of 18 months to re-evaluate and pay down their existing borrowings to within the aggregate limit on credit card and unsecured borrowings.
The MAS is studying if more time should be extended to borrowers whose current aggregate unsecured debt significantly exceeds 12 months of their income. The MAS is also seeking public feedback, by Oct 10, on the draft amendments to the Banking (Credit Card and Charge Card) Regulations and to the relevant MAS Notices arising from these rule changes. The consultation paper can be found at MAS’ website.
http://www.todayonline.com/singapore/mas...edit-rules
MAS to roll out changes on credit card, unsecured credit rules
SINGAPORE — From Dec 1, the Monetary Authority of Singapore (MAS) will roll out changes to rules on credit card and unsecured credit.
The MAS said the changes are aimed at improving lending practices by financial institutions and enabling individuals to make better borrowing decisions.
The key policy changes, according to MAS, are:
(a) Financial institutions will be required to review a borrower’s total debt and credit limits before granting a new credit card or unsecured credit facility, or increasing the credit limit on such facilities. This is to enable a more realistic assessment of an individual’s borrowing capacity.
(b) Financial institutions will be required to disclose to individuals who roll over their credit card debts and revolving credit facilities the potential cost of doing so and how the debt will accumulate. This will help borrowers make more informed credit decisions, taking into account the total cost of borrowing.
© Financial institutions will be required to obtain a borrower’s express consent for the amount of each credit limit increase. This will ensure that credit limit increases are not extended to borrowers unless they agree to such increases.
(d) Financial institutions will not be allowed to grant further unsecured credit to individuals whose unsecured debts with those financial institutions are more than 60 days past due, until all past due amounts are paid. Other financial institutions will also not be allowed to grant new cards and unsecured credit facilities or increase credit limits on existing facilities. This will help individuals who already have difficulties repaying their existing debt avoid getting into further debt problems.
(e) Financial institutions will not be allowed to grant further unsecured credit to individuals whose aggregate interest-bearing outstanding unsecured borrowings across all financial institutions exceed 12 months of their income for 90 days or more. This includes not being able to charge further amounts to all existing unsecured cards and unsecured credit facilities. Financial institutions will also not be allowed to grant new unsecured cards and unsecured credit facilities. This will help individuals who have already accumulated high levels of debt through credit cards and unsecured credit avoid accumulating further debt,
The MAS said the proposals will be implemented in stages.
Borrowers will have a transition period of 18 months to re-evaluate and pay down their existing borrowings to within the aggregate limit on credit card and unsecured borrowings.
The MAS is studying if more time should be extended to borrowers whose current aggregate unsecured debt significantly exceeds 12 months of their income. The MAS is also seeking public feedback, by Oct 10, on the draft amendments to the Banking (Credit Card and Charge Card) Regulations and to the relevant MAS Notices arising from these rule changes. The consultation paper can be found at MAS’ website.
http://www.todayonline.com/singapore/mas...edit-rules
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