Speech by Mr. Louis Ng Kok Kwang, MP for Nee Soon GRC at the Second Reading of the Moneylenders (Amendment) Bill [Bill No. 48/2017]
Sir, I welcome the move by the Bill to professionalise the moneylending industry. With these amendments and although I know it will take a lot more time, I hope stories of corridor walls being graffitied with O$P$ signs, locks vandalised with glue, and front doors being splashed with paint will be a thing of the past.
I have a few points to clarify on the wide-ranging powers and sensitive personal data that the Registrar and the Moneylenders Credit Bureau will possess, and the other methods for promoting responsible and safe lending.
Enforcement of provisions relating to money lending business in foreign countries
One basis upon which an individual would be deemed unsuitable to take part in the moneylending business is where they had carried on moneylending business in a foreign country for which the licence has been withdrawn, cancelled or revoked by an authority in the foreign country.
While this is sound in principle, can I find out how enforcement of those provisions will look like in practice? How will the Ministry verify whether the individual has carried on in any such moneylending businesses overseas? Does the Ministry have any plans to work with foreign authorities?
Provision of reasons for refusal
Next, the Registrar will have wide discretion to refuse or cancel approval granted for various applications under the amendments. Will the Registrar be providing reasons for refusing applications? What are the channels and grounds for appeal for someone whose application has been refused?
Protection of sensitive borrower data
Given that licensees and the Moneylenders Credit Bureau will possess sensitive borrower information, I am concerned about the security and confidentiality of that data.
While the provisions impose duties on the use and disclosure of borrower information and duties to maintain confidentiality and security on licensees and the MLCB, I notice that licensees are not under the same obligation as the MLCB to notify the Registrar of events that compromise the confidentiality or security of its data.
Would there not be similar if not greater need for oversight over individual licensees who may not have the same technical ability as the MLCB in maintaining security arrangements? On the same note, will the Ministry be providing technical guidance to support licensees in protecting this sensitive information?
Use of borrower data by public agencies for policy formulation
Next, can the Minister clarify what duties a public agency that obtains borrower information and data under Section 30ZC are under to protect that information? Would the information be available to anyone within the public agency, or only the individuals or departments requiring the information for policy formulation?
This is of concern especially because public agencies which are specified in the Personal Data Protection (Statutory Bodies) Notification 2013 are excluded from data protection obligations in the Personal Data Protection Act 2012. Instead, public agencies are subject to relevant internal government rules and sector-specific legislation as stated in the Personal Data Protection Commission’s website FAQ. What are these specific rules and duties public agencies are bound by when they obtain borrower information and personal data under Section 30ZC?
Given that the disclosure of information is only permissible for policy formulation or review, would it be necessary for the personal data to be in an individually identifiable form? Would it not be sufficient for the purposes of formulating broad policy for the data to be anonymised?
Regulation of moneylender advertisements
Next, in response to a call for feedback over Facebook, Mr Kane Tan highlighted the concern of moneylender advertising. Currently moneylenders advertising is regulated under directions issued by the Registrar of Moneylenders in addition to general requirements for all advertisements.
However, loanshark advertisements through SMS messages remains common. Does the Ministry have plans to step up efforts to clamp down on such illegal advertising and to help the layperson distinguish between licensed and illegal moneylenders?
Such efforts must be appropriately targeted, recognising that that those who turn to loansharks may have lower literacy skills. Awareness-raising must also dispel the false belief that only those who are involved in illegal activities like gambling or drugs turn to loansharks when in fact “ordinary” people from all walks of life can become entangled with illegal moneylending.
Further, can the Minister clarify whether platforms that are not themselves moneylenders but connect people to other moneylenders are covered under the Registrar’s directions on advertising?
For instance, can a search aggregators that compare moneylenders advertise through sponsored links or online advertisements which is not permitted for licensees themselves? Allowing such advertising would seem to circumvent the objectives of regulating moneylender advertisements.
Guidelines for debt collection practices
On the recommendations of the Advisory Committee on Moneylending which formed the basis for these amendments, the Ministry had indicated that it will review the recommendation to create guidelines for acceptable debt collection practices at a later stage. Does the Ministry have a timeline for the review of this recommendation?
Support for vulnerable borrowers
Lastly, to complement its efforts in regulating the supply-side of borrowing, it is also important for the government to address the demand for credit by providing support for vulnerable borrowers. There are two dimensions to this problem – preventing individuals from getting into problem debt in the first place and helping those who are in debt to regain control of their finances. Credit Counselling Singapore is a debt charity that has done commendable work through counselling, facilitating debt restructuring, and education on credit management. I urge the government to increase support for and promote the work of such organisations to provide individuals with alternatives to illegal moneylending.
Sir, notwithstanding the above clarifications, I stand in support of this Bill.