Quick Loan Consumer Protection Bill Voted Out ({{commentsTotal}})

Source: Photo: Postimees/Scanpix

Parliament has voted down a draft law aimed at reducing profit opportunities for instant loan providers, 46-30, with coalition members finding it followed too close on the heels of a previous law and risked being paternalistic.

The bill tabled by the Social Democrats would have prohibited loans from being dispensed in cash and set a limit on the annual percentage rate, uudised.err.ee reported.

Speaking before the vote, MP Neeme Suur, who introduced the draft legislation, likened the measures to a speed limit for drivers and said that profiteering should under no circumstances be allowed. He called previous efforts made by Parliament in the spring insufficient.

"In the spring, we tried to bring order to the quick loan market and we made two fundamental changes. We wanted ads to be more normal and not to incite people to borrow like there's no tomorrow, as well as for creditors to be liable for checking whether the customer is capable of repaying the loan. Now there is the question whether this is sufficient or not. The Social Democrats find it is not."

Valdo Randpere of the Reform Party countered that Parliament should not be hasty and overzealous and instead allow the restrictions set in the spring to take hold.

Randpere said the draft law voted on today would set unreasonable restrictions on the economic activity of the quick loan companies.

"We have to keep the provision of credit from being done under completely unreasonable conditions - and this we have done. But we cannot be absolute in prohibiting people from doing […] stupid things. We don't live in a society where everything can be regulated to the finest hair," he said. Going too far "would just create a black market or exploitation of loopholes," he added.