Russian State Duma considers a self-ban on loan issuance for citizens
The State Duma has taken the first reading of a bill that would let individuals prohibit banks and microfinance organizations from issuing consumer loans to them. This development was reported by TASS.
The proposed document envisions a mechanism by which residents could set a ban in their credit history on new loans from banks and microfinance companies. The restriction would not cover loans secured by vehicles or mortgages.
The ban could be adjusted or lifted at no cost through the State Services portal or by contacting a microfinance company (MFC). A key condition for the complete rollout of the mechanism is the use of SNILS, the Russian personal insurance and social number system.
Should the bill pass, the law would come into force on July 1, 2024.
The draft law on the right of Russian citizens to self-prohibit loan issuance was submitted to the State Duma on April 20, 2023 by a group of deputies led by Anatoly Aksakov, who heads the Financial Market Committee. The lawmakers said the aim is to curb fraudulent borrowing through the illegal use of personal data and social engineering techniques.
Earlier, Izvestia cited a survey related to the online lending service Moneyman, reporting that a large majority of Russians, about 70 percent, support a personal ban on loans and microloans.
Olga Daineko, a researcher at the Research Institute of the Ministry of Finance and a contributor to the portal Myfinance.rf, noted that a self-imposed loan ban could help reduce fraud but would not eradicate it entirely.
Earlier reports suggested that restrictions on debt collection in Russia might lead to higher loan interest rates as lenders adjust to new risk dynamics.
In commentary on the bill, observers highlighted that the mechanism could provide a personal shield against predatory lending practices and protect consumers who worry about over-indebtedness, while also raising questions about how lenders would assess creditworthiness when self-imposed bans are in effect.
Experts also pointed out that the practical effectiveness of such a measure would depend on how comprehensively information systems are integrated with the SNILS-based verification process and whether credit history bureaus align with the proposed ban mechanism. The discussion continues as policymakers weigh the balance between consumer protection and credit access in a fast-changing lending market. [citation]