The full amount of credit card penalty interest provisions of the King or international practice

Recently, an overdraft 110,000 yuan five years, Wang Xi'an credit card holders have to repay 44 million suffered aroused public concern. It is understood that the current domestic addition to ICBC to take part of the penalty interest, most banks have adopted the full penalty interest. That if the cardholder overdraft 10,000 yuan 9990 yuan, also as of the repayment date, even if only $ 10 also, the bank is based upon 10,000 yuan on interest rates.

Although there is another part of the bank launched tolerance repayment less than $ 10 provides that if the cardholder repayment of the difference in the less than $ 10, which could be waived penalty interest. There are some banks to implement measures to delay the repayment date to delay the repayment date, as long as the cardholder call ahead to apply for up to 7 days. However, these measures still did not change the nature of the full penalty interest ". That is, as long as the cardholder is not repaid in full the stipulated period, more than 10 yuan will still be faced with penalty interest at full cost.

November 6th, Shandong lawyer Wang Xinliang sent a letter to the China Banking Regulatory Commission Chairman Shang Fulin, request credit card the full penalty interest "provisions of the King CBRC involved in the banking sector to rectify or repealed.

Practices prevalent in the majority of domestic banks, "unconscionability" It seems consumers, banks and more confidently in line with international practice, "with international standards", how the truth and facts? "Legal Daily" the special invitation financial law experts to resolve this problem to be practical level of legal principles and the rule of law.

Square: the full penalty interest "has long been the mainstream international bank monopoly vices stems from a lack of supervision

Currently, some of the country's commercial banks to the international practice as an excuse to disregard the phenomenon of financial consumer rights, and to some extent reflects the arrogance and ignorance of these commercial banks, but also against the background of the domestic financial consumer protection legal system is imperfect embarrassing situation Bank Law Research of the China Law Society, vice president of Northwest University of Political Science and Economic Dean of the School of Law, Financial Law Research Center Director strength to tell the "Legal Daily" reporters.

Developed countries "average daily balance method"

Strong international practice and meticulous research. He said that the situation has already occurred great changes. Full penalty interest "rules of the so-called credit card" is no longer in the international mainstream, Europe and the United States and other developed countries, the "average daily balance method" (Average Daily Balance) as the main method to calculate delay payment.

"Average daily balance method" card issuers overdraft balance for each day of the billing cycle accumulation (card issuers can choose whether to be cumulative occurred in the current consumer overdraft), calculate the average daily overdraft balance within the billing cycle, and then multiply number of days in the billing cycle, the daily interest rate to calculate the interest. Higher share of the U.S. credit card market, several major credit card issuers such as Bank of America, Wells Fargo, First Financial Capital Company are taken per annum of the average daily balance method, compared to the interest-bearing full penalty interest point of view, not only interest relative reduction has become more reasonable.

Large commercial banks, including HSBC, Citibank (Hong Kong), Hang Seng Bank in Hong Kong, most of the commercial banks are non-full the also-bearing system. For example, with effect from November 1, 2012, "HSBC Credit Cardholder Agreement" 6 (C) provides that "the cardholder maturity yet all monies owed to the Bank settlement statement knot (a) all of unsettled statement balance shall from prior to the maturity date a statement date per annum until all monies paid to date, and (b) prior to the maturity date a statement future accounting transaction amount per annum and shall be based on the date of the transaction until all monies paid to date, the financial costs will be based on our current HSBC retail banking and wealth management client bank service fees Introduction monthly interest rate calculated on a daily basis. "listed.

In addition, HSBC retail banking and wealth management client bank service fees Profile G1 financial costs of private credit card terms and conditions, also with effect from November 1, 2012, states: "If a cardholder the maturity yet to the Bank settlement statement all monies owed, then (a) all unsettled statement balance shall be from the due date a statement from the date of interest-bearing date until all monies paid to date, and (b) by the due date a statement future accounting transactions per annum payment shall be based on the date of the transaction, until all amounts paid to date. related finance charges will be calculated monthly interest rate of 2.50% on a daily basis (up to the equivalent of shopping spending rate of 34.46% per annum; or cash loan interest rate of 35.61% per annum, the annual interest rate, including cash advance fee and handling fee).

In Taiwan, there has been no similar continent full penalty interest "approach. Taiwan Public Bank revolving credit interest calculation instructions, for example: the cardholder can choose payment by way of revolving credit, the payment deadline for the current period has more than the minimum amount payable (or equal to the minimum amount payable) pay it to Public Bank. The unpaid amount and the remaining part, the cardholder can postpone payment, taking into account the payment of interest on revolving credit, and that they may have to delay all or part of the payment amount at any time to settle the original. Such practices, intended to provide convenience for the cardholder repayment and grace periods, but not gratuitous. Receivable outstanding balance of commercial banks is part calculated to amount, according to the the cardholder set depending on the credit score differential revolving credit interest rates (a maximum of about 20 per cent per annum; daily interest 550 ppm V) date of receivable settle. Not fall into "the full penalty interest.

In Japan, the full penalty interest "does not exist. Borrowing money for the purpose of consumer interest must be in line with the interest of the law range based on the current interest restrictions Law stipulates that, if more than the interest the limits prescribed by law, and more than partially invalid. The Act provides: "principal under 100,000 yen, the annual interest rate shall not exceed 20%; principal under 1 million yen, 100,000 yen or more, the annual interest rate shall not exceed 18%; principal 1,000,000 yen or more occasions, the annual interest rate shall not exceed 15%. Because of the interest limit the presence, allows banks to charge customers interest, are also subject to the limitations of the law, the so-called "full penalty interest" and therefore can not exist in Japan.

Powerful special emphasis on: the credit card of the high penalty interest should otherwise specified terms. Otherwise difficult to achieve a truly "voluntary equality"; credit card is the "credit" for both cardholders and card issuers need trustworthy.

The ineffective supervision Bank of abuse of monopoly

Wu Ge, served 10 years banking consultant Beijing Wen senior partner of the law firm also said in an interview with the "Legal Daily" reporters, the full penalty interest does not exist in international practice. According to international practice, the penalty interest generally generate borrower (bank users) can not repay on time, the interest rates are generally higher than normal interest rate 1-2%. Penalty interest focus reflects the losses generated by the bank can not use the no refund, should not be equated with punitive fines reflect bank borrowers. Not many banks in the international concept, but the amounts not returned full penalty interest calculated on the basis of penalty interest amount.

Wu Ge, Chinese commercial banks in the credit card business was to learn the advanced experience of international counterparts, but they are learning more how many card issuers, and more profitable, less investment, to avoid infringing the legitimate interests of the consumer, commercial banks and There is no school place. Practices in addition to the full penalty interest unreasonable provisions in practice, domestic commercial banks flagrant violations of the rights and interests of consumers everywhere.

For example, in an irresponsible manner junk card overdraft consumption, stimulate spending power or lack of spending power through civil and criminal means to crack down on the cardholder; using the credit system will be blacklisted credit card holders thus excessive protection of the interests of commercial banks; overcharged form contract, the overcharges cardholder costs, interest, penalty interest; poor management, leaked cardholder personal information.

Unauthorized use of credit cards, for example, the international community is the cost of the issuer by the insurance company claims, personal only take on up to more than 50 U.S. dollars. Almost all of mainland China issuing bank, through its form contract risk into credit card theft to the cardholder. Event reference card is stolen, the issuing bank requires the cardholder repayment and timely repayment submit to central bank credit center, included in the blacklist of bad credit, thereby forcing the cardholder repayment.

Contains certain terms in the contract signed by the consumer and the bank, often clearly favor the banking side, that the terms of Overlord, such as "off the cabinet shall not be responsible for" loans payable upon the loan consulting fees, off-site ATM fees. In the consumer repayment methods and time, banks are also contracts made more rigorous description, such as overdue payment, whether it is for a valid reason or malicious overdraft, the Bank shall be in the consumers' personal credit history records , cause consumers can not be carried out under a loan. When the Bank's own operational errors, such as customers accept bank wealth management business, resulting in huge losses, the bank belonging to private clients and wealth managers are often based on the contract that the bank only third party to provide a trading platform "," events "as an excuse for their own exemption.

Wu Ge analysis, the emergence of these problems stem from the bank's monopoly Corporate, personal cash flow needs, and can only go through bank loans. Thus, the Bank has a monopoly of the few, according to its own capital and market share dominance, limiting the influx of private capital to the financial markets, but also limit consumer choice of service and service consumers enjoy attached to many unreasonable trading conditions.

Wu Ge also reminded that caused by today's bank monopoly status is an important reason, is that the CBRC ineffective supervision of banks.

For example, credit card management as of the end of 2011, the workers and peasants in four state-owned commercial banks, including 10 banks last year, newly issued credit card more than 45 million cards issued totaled nearly 2.6 trillion. Bank crazy expansion of business capacity expansion card issuers object no repayment ability of students and other groups, the China Banking Regulatory Commission has not issued any ordinance to be stopped or boot, eventually leading to overdraft amounted to 812.956 billion yuan, an increase of 363.796 billion compared to the end of 2010 yuan, an increase of up to 81%.

Negative side: the key is whether the consumer was aware of the understanding of "full penalty interest" does not violate the mandatory provisions

Law School associate professor of the Central University of Finance and Economics Xinghui Jiang had engaged in post-doctoral research at the Commercial Bank of China (3.87,0.00,0.00%). He argues that the issue is not to implement the full penalty interest, or the difference between the penalty interest, but the relevant provisions of the transparent or not, consumers understand whether or not the problem. The solution to this problem is a systematic project, how to build all aspects of the issue of the protection of financial consumers.

On the full amount of penalty interest of credit card, it was argued that the provisions are "King terms, the bank not tried to remind obligations, and therefore invalid. Xinghui Qiang think, if taken to court, this claim that "the burden of proof is difficult. In addition, banks can also "King terms" in bold, to show its best to remind obligations. Of course, customers can also claim that the bank not be verbal reminders, but this claim also there is the burden of proof is difficult "issues, laws and regulations as well as the CBRC regulations and normative documents did not require the bank to verbally remind. Therefore, any such dispute, the customer is hard won.

Others advocate this terms "unconscionability". 10 dollars owed to the bank credit card holders, banks calculate penalty interest at 100 million, which "apparently lost fairness". Xinghui Qiang believes that there is some truth in this claim. But the key is, if the credit card holders agree that banks do it? In the case of credit card holders, the knowledge and consent, it is difficult to say that the terms "unfairness". The long and the ultimate look, "the world is no free lunch, wool or out of sheep. Credit Card Why are there so many promotions? Credit card interest-free period, some credit card discount. These costs substantially all of the bank's other places to get it back. Full penalty interest is to punish careless credit card holders and other costs to get it back, and can get a lot of money earnings a "business model" or a "trap" the banks. Of course, if the credit card holders informed, it is estimated that not many people will agree to accept the full penalty interest. Therefore, the key here is not the "unfairness" issue, but whether informed.

Xinghui Qiang said that the full penalty interest is not a Chinese invention, is a universal practice in the credit card industry. "Now we know through several popular case finally know the original credit card the full penalty interest thing. Before this, we do not know. Few people can read before signing credit card agreements not only credit card agreements agreement so we went to the bank counter business to sign a lot of word the signature point protocol (such as online banking service agreements, etc.) did not how many people seriously and carefully read, we do not read the signature on, post a question only regret the too late. "

In, Xing Kuaiqiang financial consumer education should be strengthened to counter it. "To strengthen financial consumer education, many countries have set up specialized agencies. For example, Canada's financial consumers Authority Financial Skills Council of Australia, the Australian Government, the U.S. Treasury Department under the Office of Financial Education, financial skills and Education Improvement Committee Consumer Financial Protection Bureau under the financial skills of the office. the British Banking Advisory Service (MAS), etc. In our country, the awareness of the importance of financial consumer education is clearly very place. "

In addition, customers even after reading the agreement may not be able to find all the hidden costs. Xinghui Qiang said that the opacity of the credit card fee is a problem common to different countries, and is a national financial supervisory authorities whom headache. Addressing this problem, the financial developed countries have carried out a series of attempts. For example, the Fed is widely used consumer test "(consumer testing) to improve the financial institutions of the consumer public, and make it become a standard code of conduct. Even if the maximum extent of the public can not be completely the consumer to understand, in this case, the Fed would ban such practices. The United States, "Dodd - Frank Act also established the Consumer Financial Protection Bureau, and authorized its engaged and provide financial products related to injustice, fraud or extortion behavior and even criminal behavior, to ensure the related costs, benefits and risks in order to prevent Throughout, the consumer purpose, to take appropriate and effective information disclosure measures. Like some lawyers argued, therefore, the regulatory bodies should prohibit credit card the full penalty interest situation from abroad, is not impossible.

Although possible, but Xingkuai Jiang, in our country the possibility of not too much. He said that foreign many well-established practice, very worthy of our study and learn.

Yang Wan-Tao, senior partner of Zhong Lun Law Firm, purely from the perspective of the legal system, under the framework of the existing system, the full penalty interest is not in breach of any mandatory prohibition. For bank fees, can be seen as a form of market behavior. This problem is caused public concern, and fair and reasonable and good faith with the legal principles of hook, how to look at this issue, in fact, is the need to judge from various facts. For example, the bank's obligation to inform how to claim to be fulfilled? This in itself is a difficult matter of judgment, the contract states that still remind or send instructions is appropriate? In many cases, even if the bank repeatedly reminded, consumers may not be aware.

Yang Wan-Tao is also linked to the domestic environment, we have not yet formed a stable social environment and social operating mechanisms, although not in violation of the mandatory provisions but it also brings a lot of controversy practice. This look at the policy environment more supportive and encourage commercial behavior still more inclined to protect their personal interests. In fact, the problem in each country's different historical periods have focus. In China, may be more inclined to the former.