3 Apr 2006 Posted in Parliamentary speeches and responses
- Mr Speaker, Sir, I beg to move, “That the Bill be now read a Second time”.
Objective of Bill
- Members may recall that last year, we amended the Moneylenders Act to introduce higher penalties to curb the rise in illegal moneylending activities and related harassment cases. I informed members then that those amendments were part of a larger exercise to update the Moneylenders Act.
- The Moneylenders Act was enacted way back in 1959. Its main objective then was to regulate moneylending so as to put a stop to malpractices that were carried out by unscrupulous lenders. That objective of preventing such practices remains.
- However, in recent years, the moneylending business in Singapore has seen vast changes with the introduction of new and more sophisticated business financing and consumer credit services. Therefore, we need to update the regulatory framework in the Act to allow it to remain effective in dealing with these and future developments. This is especially so with new business models that are different from traditional moneylending as we know it, but which do not come under regulatory frameworks like those governing banks, finance companies and the securities industry. Amendments are necessary to allow us to impose rules on both licensed and exempted moneylenders to have greater consistency with financial institutions in the regime governing personal loans.
- Furthermore, the global fight against money laundering and terrorism financing also requires us to have suitable powers in our laws to allow for more specific measures and guidelines to be put in place for moneylending activities. The current framework, for example, does not allow for rules and guidelines to adopt the Recommendations of the Financial Action Task Force. The Financial Action Task Force, or FATF for short, is an inter-governmental body whose purpose is to develop and promote policies, both at national and international levels, to combat money laundering and terrorism financing.
- Having provided this backdrop of the developments, let me touch on the salient features of the Bill.
Proposed amendments affecting the Registrar
Clause 4 (new Sections 10A and 10B)
- Sir, clause 4 includes two new provisions to enable the Registrar to more effectively administer the Act. He will have the power to issue notices to moneylenders to provide information or documents, and the power to enter premises and inspect documents. Failure to comply with the Registrar’s notice or obstructing the Registrar’s entry will be an offence punishable by fine or imprisonment.
Clause 3 (amendment to Section 10)
- Sir, under clause 3, the Registrar will be given the discretion to suspend a licence in appropriate cases, instead of only having the power to revoke it.
Proposed amendments affecting the Minister
Clause 5 (amendment to Section 36)
- Under Clause 5, the Minister will, under clause 5, have the discretion to revoke, in whole or in part, an exemption granted to an entity when there is a breach of any condition or rule or if it is in the public interest to do so.
- The Bill makes it clear however, that any revocation will not affect any moneylending transaction entered into before the date of the revocation.
Clause 6 (repeal and reenactment of Section 37)
- The current limited rule-making powers of the Minister will be repealed and replaced by a modern set of powers that will enable him to, amongst others, prescribe rules for all moneylenders or specific classes or descriptions of moneylenders.
- The rules can cover measures to prevent money laundering and the financing of terrorism, as well as various aspects of moneylending businesses, including the maximum amount that a moneylender can lend to a borrower. These rules can also be extended, where appropriate, to regulate entities that have been granted discretionary exemptions from the Act.
- In proposing these amendments, we continue to be mindful of the need to strike a balance between preventing people from spending beyond their means on the one hand; and providing access to credit for those who are in genuine financial need and who do not have access to social assistance schemes or legitimate channels of lending on the other.
- In conclusion Sir, these amendments will enable the Government to more effectively regulate moneylenders and to establish a more consistent regulatory regime for personal loans. They will also help us in our fight against money laundering and terrorism financing.
- Sir, I beg to move.
Last updated on 24 Nov 2012