KUALA LUMPUR: Buy now-pay later schemes and other such credit-based businesses will have to be more transparent and responsible under a proposed new law.
The Consumer Credit Bill 2025, tabled for first reading in the Dewan Rakyat, seeks to protect the interest of credit consumers and ensure responsible lending.
The Bill, which seeks the establishment of a Consumer Credit Commission, was tabled by deputy finance minister Lim Hui Ying (pic) yesterday, with the second and third readings scheduled for the next meeting.
It also provides for the regulation and supervision of both conventional or Islamic credit business and credit service business to ensure proper conduct and responsible lending practices.
Under the proposed law, credit providers who are involved in moneylending, pawnbroking, hire purchase, credit sale, buy-now pay later scheme, leasing and factoring can be regulated by the commission.
It also covers Islamic credit business like Islamic financing facility, pawnbroking, hire purchase, credit sale, buy-now pay-later schemes, leasing and Islamic factoring.
Businesses offering credit will be licensed by the commission, while debt collection services – such as impaired loan or financing acquisition and debt counselling and management – will be registered.
This law, however, will not cover licensed banks and financial institutions, insurance and takaful providers, credit card and charge cards and cooperatives, which are already covered under existing laws.
Under the new law, credit businesses will be barred from featuring information that is deemed misleading, deceptive, or likely to mislead in terms of its nature, features, terms, or price of products or services offered.
The proposed law prohibits any act or attempts to induce consumers through advertisement, dishonestly concealing or omitting vital information on the credit product or services, exerting undue pressure, influence or threats on consumers, as well as demanding payments for unsolicited credit products or services.
Under the law, the commission’s role will be to promote ethical conduct among credit providers and credit service providers and to promote the growth of the consumer credit industry.
The commission can impose fees or a monetary penalty on offenders, and it can carry out investigations on matters relating to credit business or credit service businesses, among others.
The Board of the commission shall consist of an executive chairman, a deputy executive chairman, one representative each from the Finance Ministry, Bank Negara Malaysia, and the Securities Commission of Malaysia, as well as not more than four members experienced in consumer credit matters.
The members shall be appointed for a term of three years and may be eligible for reappointment for a term not exceeding two consecutive terms.
The minister may, on the recommendation of the board, revoke the appointment of a board member for being absent from three consecutive meetings, among others.
The commission will be empowered to institute civil proceedings against anyone who fails to comply with provisions under the Act.
Source: https://www.thestar.com.my/news/nation/2025/03/05/credit-businesses-face-new-law