On 30 March 2012, the Ministry of Finance of the Russian Federation posted a draft law on consumer credit (the “Draft Law”) on its official website.

The Draft Law is aimed at protecting the interests of private individuals on the lending market, establishing specifically:

  • two categories of contractual provisions: general and individual;
  • a detailed list of information to be disclosed by a credit institution to a client; 
  • the obligation of a lender to provide a customer with a free-of-charge method of repayment;
  • the right of a borrower to early repayment (in full or in part) with a prior 30-days’ notice to the lender;
  • a prohibition on charging commission for services that do not generate additional material value for a borrower (including reviewing an application and credit assessment);
  • a limitation on the penalty rate; and
  • a prohibition on transferring disputes to an arbitration tribunal. 

The Draft Law confirms a credit institution’s right to assign its rights under a consumer loan agreement to any third parties without obtaining prior approval from a borrower to disclose personal data.

According to the authors of the Draft Law, contrary to international practice, current legislation does not take into account the specific rights of a borrower that arise when obtaining consumer credit. The Draft Law is intended to address this omission.

[The federal draft law “On Consumer Lending” and the federal draft law “On Amending Separate Legislative Acts of the Russian Federation in respect of Adopting the Federal Draft Law ‘On Consumer Lending’” are published in Russian on the official site of the Ministry of Finance of the Russian Federation in the “Drafts of Regulatory Acts of the Ministry of Finance of the Russian Federation” section]