First Reading of the Draft Law on Debt Collectors and Debt Purchasers (376 SE)
Session: 15th Riigikogu, 3rd sitting, plenary session
Date: 2024-04-09 15:39
Participating Politicians:
Total Speeches: 35
Membership: 15
Agenda Duration: 41m
AI Summaries: 35/35 Speeches (100.0%)
Analysis: Structured Analysis
Politicians Speaking Time
Politicians
Analysis
Summary
Draft Bill 376, first reading: The purpose of the draft law on credit collection agencies and buyers, initiated by the Government of the Republic, is to clearly regulate the activities of collection firms and their clients in the recovery of third-party debts and the subsequent sale of those debts. The main body of the bill focuses on three central issues: the sharing of information related to debt collection, the rules for communicating with the debtor, and supervision and sanctions. The draft bill extends from consumer credit to corporate loans and also covers various acquisitions of loan debts. The intention is to set stricter requirements for collection agencies to ensure fair, transparent, and privacy-respecting conduct, and to reduce the threatening of debtors and overly burdensome court or collection procedures. It also mandates an operating license from the Financial Supervision Authority and strong supervision, along with potential sanctions and, if necessary, increased capital requirements. The draft bill also includes obligations for banks and quick loan companies: before resorting to court action, the restructuring of the debt or the further modification of the payment schedule must be considered in every case. Finally, it is emphasized that the draft bill was prepared based on the relevant EU directive, but moving forward, the intention is to increase the transparency of the debt collection market and offer debtors better protection options, requiring individuals to be prepared to proactively defend their own interests.
Decisions Made 1
The first reading has been concluded; the deadline for submitting amendments is April 25, 2024, at 17:15; the draft bill is to be forwarded to the plenary session agenda for today, April 9th, and Eduard Odinets is to be appointed as the representative of the lead committee.
Most Active Speaker
The most active participant throughout the discussion is the one identified as VTIO4yVEz1k. This individual most likely represents a government or factional delegation, actively engaging in both presentations and Q&A sessions, thus positioning themselves centrally within the debate. In terms of political alignment, they could be categorized as "other" (not left-wing, but not necessarily a figure belonging to the right-wing bloc). Nevertheless, they operate in the discussion as a strong leader and a conveyor of knowledge.
Aseesimees Jüri Ratas
AI Summary
Under the third item on the agenda, the first reading of Draft Law 376 on Credit Collection Agencies and Buyers, initiated by the government, will be discussed, and Minister of Finance Mart Võrklaev is invited to give a presentation.
Rahandusminister Mart Võrklaev
AI Summary
The draft bill regulates the activities of collection agencies in Estonia that collect or purchase loans from banks and other credit providers. It sets clear requirements for debtors regarding notification and the inviolability of private life, mandates the retention of documents and the possibility of accessing original documentation, ensures the protection of debtors' rights, and prohibits harassment. It establishes supervision and sanctions through the Financial Supervision Authority, requiring managers to meet trustworthiness standards and maintain increased capital. Furthermore, it obligates banks and quick loan providers to consider debt restructuring or a payment holiday before initiating court proceedings. The bill is based on an EU directive but goes further, covering approximately 7–8 collection firms, and will enter into force on December 31, 2024.
Aseesimees Jüri Ratas
AI Summary
Ratas thanks the minister, says there are questions, and invites Aivar Kokk to take the floor.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk thanks the director and the honorable minister and commends the informative presentation.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev briefly thanked the audience.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk asks how many debtors there are currently, and whether that number has increased or decreased over the last few years.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev stated that once debt collection companies come under the supervision of the Financial Supervisory Authority, the overall picture concerning the number of debtors and the total volume of claims will become clearer, and more precise data will be disclosed once it becomes available.
Anti Poolamets
Profiling Eesti Konservatiivse Rahvaerakonna fraktsioonAI Summary
Anti Poolamets criticizes that individuals with suspicious or criminal backgrounds are allowed to manage debt collection firms, and he believes the 25,000 euro capital requirement is too small, as it allows them to easily access the system.
Aseesimees Jüri Ratas
AI Summary
The address requested that Anti Poolamets be invited to speak.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev said that the activities of debt collection agencies need better control and regulation. This includes implementing heightened scrutiny over their management boards and establishing a capital requirement of 25,000 euros. However, he emphasized that businesses related to debt collection must not be unduly restricted, and a balance must be found between protecting debtors and ensuring that proper business practices can function. The discussion will continue during the first reading in the Riigikogu.
Aseesimees Jüri Ratas
AI Summary
The address is simply a request to Eduard Odinets.
Eduard Odinets
AI Summary
Eduard Odinets pointed out that while the draft bill focuses on the consequences, we must also examine the underlying causes, such as the availability of quick loans and the influence of advertising, and consider the possibility of imposing stricter restrictions on quick loans and amending the Advertising Act.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev told the committee that the regulation of quick loans must ensure a balance between protecting lenders and borrowers. Over the next six months, advertising and accessibility will be examined in more detail, and discussions will be held on whether quick loans should be available 24/7 or only on weekends. Furthermore, sufficient cooling-off time should be provided for these products, ensuring that entrepreneurship is not hindered while mitigating risks.
Aseesimees Jüri Ratas
AI Summary
The Vice-Chair invites Aivar Kokk to take the floor.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
This presentation clarifies that the minimum share capital for a public limited company is 25,000 euros. The capital contribution does not need to be made immediately; one can start operations and make the payment later. Furthermore, it is mentioned that the potential fine could be two to three million euros.
Rahandusminister Mart Võrklaev
AI Summary
The speech is about three million.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Three million is completely illogical, and Aivar Kokk claims that in the case of 25,000 in share capital, there is a legal discrepancy that protects the debtor to the detriment of the lender and makes lending almost foolish, while emphasizing that there are all kinds of loans, and they are also provided by private individuals.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev stated that the purpose of the regulation is to balance the interests of the borrower and the lender, focusing specifically on collection agencies so that the debtor clearly understands what is being demanded of them and what the associated additional costs are, and that before the debt is sold on or legal action is pursued, debt rescheduling or the offering of other loan products will be considered, and a suitable point of balance for the interests of both parties will be found in cooperation with the Riigikogu.
Reili Rand
Profiling Sotsiaaldemokraatliku Erakonna fraktsioonAI Summary
Reili Rand said that she was pleased to be working towards protecting the interests of the borrower under the joint regulation and for avoiding the focus of debt collection agencies. At the same time, she asked how far along the creation of the positive credit register is and whether the process can be accelerated so that the credit register would finally become operational.
Aseesimees Jüri Ratas
AI Summary
The Deputy Chairman invites Reili Rand to speak.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev said that a positive credit register is extremely important, and the work completed in cooperation with Cybernetica is ready. A draft bill will be presented to the Riigikogu this autumn, which will create a strong and well-thought-out system for the protection of highly sensitive data.
Aseesimees Jüri Ratas
AI Summary
The speech is a short, direct request to invite Eduard Odinets to speak.
Eduard Odinets
AI Summary
Eduard Odinets emphasizes that consumers feel they are being treated unequally by credit institutions and that the decisions of the Consumer Disputes Committee are not binding. He points to the need for a financial ombudsman institution to be established under the Financial Supervisory Authority, whose decisions would be binding, and asks whether negotiations have recently taken place with the new Minister of Justice to resolve this issue.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev stated that they have not had any direct initiatives concerning this topic, but given its importance, they are considering reviewing it together with the Minister of Justice. He noted that it would also align with the issue of regulating quick loan firms.
Aseesimees Jüri Ratas
AI Summary
Vice-Chairman Jüri Ratas invites Mart Maastik to the stage.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Maastik noted that Reili Rand raised the question of establishing a national credit register, but given that private sector credit registers like Krediidiregister OÜ and Taust OÜ already exist on the market, this raises the question of whether a new national register is sensible.
Rahandusminister Mart Võrklaev
AI Summary
Finance Minister Mart Võrklaev confirmed that he does not plan to compete with private enterprise, and explained the positive credit register as a tool that would provide lenders with an overview of an individual's obligations and solvency, allowing loan applicants to replace the submission of bank statements with data made available upon the individual's consent, thereby serving as a convenient tool for the borrower.
Aseesimees Jüri Ratas
AI Summary
Jüri Ratas thanked the minister, stated that there were no questions, and invited Eduard Odinets, the Chairman of the Legal Affairs Committee, to the Riigikogu rostrum to give his report.
Eduard Odinets
AI Summary
The Legal Affairs Committee thoroughly discussed the draft law concerning credit collectors and buyers during its session on April 1st, noting that the debate was extremely pleasant and constructive. The discussion covered substantive issues related to granting and receiving credit (including the positive credit register, limiting default interest rates, the regulation of collection agencies, and solvency assessment), as well as supervision and market functioning. It was decided to forward the bill to the Plenary Assembly for the conclusion of the first reading by April 9th, and to appoint Eduard Odinets as the lead committee member.
Aseesimees Jüri Ratas
AI Summary
Deputy Speaker Jüri Ratas offered his thanks and announced that the audience had at least one question. He then addressed Mart Maastik and asked him to pose the question.
Mart Maastik
Profiling Fraktsiooni mittekuuluvad Riigikogu liikmedAI Summary
Mart Maastik raises the point that the problems faced by quick loan borrowers may stem from the state's fiscal policy and tax increases, suggesting that the upcoming car tax will further increase the workload on debt collection and credit institutions. He also asks what a positive credit register entails and whether a negative credit register even exists.
Eduard Odinets
AI Summary
Eduard Odinets said that they discussed the topic of regulating debt collection agencies and credit purchasers, and introduced a positive credit register, the purpose of which is to consolidate all of people's obligations and provide the lender with a comprehensive overview for making better lending decisions, unlike a negative register.
Aseesimees Jüri Ratas
AI Summary
The Deputy Speaker, Jüri Ratas, thanked the rapporteur, stated that there were no questions, opened the debate, and invited Aivar Kokk, the representative of the Isamaa Party faction, to the rostrum.
Aivar Kokk
Profiling Isamaa fraktsioonAI Summary
Aivar Kokk said that although the direction of the bill is correct, the requirement for 25,000 euros in share capital must be clearly interpreted as a monetary contribution, and the size and application of the fine must be clarified to avoid ambiguous litigation and ensure a balance between the lender and the debtor, where the debtor is given opportunities to pay the debt, and the commission seeks to strengthen the sense of duty, rather than giving the impression that the lender is bad and the debtor is good.
Aseesimees Jüri Ratas
AI Summary
Ratas announced that the discussions are closed, the leading committee proposes to conclude the first reading of Draft Bill 376, the deadline for submitting amendments is 5:15 PM on April 25 of the current year, and the first reading is concluded, thereby finishing the consideration of the third item on the agenda.