The new regulations on individual loan interest fees are officially implemented.

On August 1, the new regulations regarding personal loan interest and fees officially came into effect. Lending institutions will present a comprehensive financing cost disclosure form to borrowers, incorporating all costs associated with personal loans into the comprehensive financing cost, including loan interest, installment fees, credit enhancement service fees, overdue penalty interest in the event of default, and penalties for misappropriation. According to a report by the Financial Association, various consumer finance companies and lending institutions have upgraded their systems, processes, and disclosures in preparation for the implementation of the new regulations. However, there are also financial institution representatives who acknowledge the challenges in standardizing the accounting principles for interest and fees across various cost types. Additionally, individuals from some lending support organizations stated that maintaining consistent information presentation across multiple channels, especially in scenarios involving complex installment and credit enhancement mechanisms, poses a significant challenge. Industry experts interviewed by the Financial Association indicated that from the consumer's perspective, the new regulations help protect their rights and reduce disputes arising from information opacity. For institutions, the new rules will lead to a divergence in the fortunes of different types of institutions, such as financial institutions and lending platforms. Specifically for lending platforms, their previous fee structures are facing systematic reconstruction. Technology platforms and flow channels need to redesign their fee models, shifting from monetizing traffic to a service-based fee model grounded in real value. Starting August 1, lending institutions will present borrowers with a clear disclosure of personal loan interest and fee costs. The new regulations apply to various lending institutions, including banks, consumer finance companies, auto finance companies, trust companies, and micro-loan companies. Previously, several surveyed institutions stated that they had upgraded their systems, processes, and disclosures in preparation for the new regulations. However, various challenges remain during the implementation process that need to be addressed. A representative from a bank-affiliated consumer finance company admitted to the Financial Association that standardizing the accounting principles for interest and fees, which involve multiple cost types, has been a challenge, for which the company has set up a special task force to repeatedly verify solutions. Moreover, to ensure a smooth transition regarding the full-channel display process, they are implementing it in batches and conducting collaborative testing. Regarding the system overhaul of third-party cooperative institutions, they have established technical standards and clarified timelines with all partners to ensure timely adjustments. "For lending support institutions, there are also certain rectification difficulties," said a representative from a lending support company to the Financial Association, pointing out challenges related to systematic reconstruction and maintaining consistent information across diverse channels, particularly in scenarios that involve complex installments and credit enhancement mechanisms. Additionally, many purely traffic-driven secondary lending platforms are constrained by a shortage of technical and legal resources. The representative from the lending support company further stated that a single loan involves multiple parties such as lending institutions, lending support, guarantees, and insurance, with independent cost ledgers, which makes cross-entity reconciliation and collaboration costly. The overwhelming number of scattered marketing channels, such as short videos and social groups, requires extensive rectification of marketing copies and posters, which may still pose risks of inconsistencies between promotional and contractual information. This necessitates thorough verification by the relevant institutions. Lending support institutions admit that conversion rates may be affected, as institutions need to balance compliance requirements with profit goals. An insider from a consumer finance company told the Financial Association that from an industry perspective, the new regulations will further drive consumer finance institutions to enhance their operational management systems, imposing higher standards on product design, business processes, cooperation channels, and system capabilities. For compliant institutions, the new regulations are not only regulatory requirements but also critical opportunities to improve service capabilities and enhance market trust. Under the new regulations, an individual from a scenario-based lending support institution believes that the fates of different types of institutions, such as financial organizations and lending platforms, may diverge. This individual elaborated that banks and consumer finance companies, with their advantages in funding costs and self-operated capabilities, are likely to take the initiative in the competitive landscape of transparent pricing, thereby putting significant pressure on small and medium-sized banks and lending support institutions that rely on external leads and outsourced risk control. Their previous model of "attracting customers with low rates while realizing high fees" will be undermined. "For lending platforms, the past fee structures are facing systematic reconstruction," said the previously mentioned lending support individual, stating that technology platforms and flow channels must redesign their fee models, transitioning from a traffic monetization logic to a value-based service fee model. Those relying on service fee splits for profit are seeing their arbitrage opportunities diminish, with many institutions at risk of being removed from the partnership list. Meanwhile, lending platforms with authentic consumer scenarios tend to have simpler fee structures and controllable compliance costs, aligning better with the demands of future business development. An individual from a leading lending support organization acknowledged that interest and fee disclosures could affect conversion rates for lending support institutions. Another representative from a leading lending support company also mentioned to the Financial Association that the new regulations would result in reduced business income and short-term pressure on profits, but in the long run, many small and medium lending support institutions relying on fee splitting may accelerate their exit from the market. Some individuals from lending support companies indicated to the Financial Association that the new regulations will include all third-party charges in the overall cost accounting, with licensed institutions bearing the primary responsibility for compliance. From the current state of the industry, the key role of the new regulations is not merely to directly raise or lower interest rates but to thoroughly terminate the past marketing model of "nominal interest rates attracting customers and hidden fees capitalizing." The comprehensive costs actually borne by borrowers can no longer be concealed, and the long-term operational space reliant on splitting interest and fees and indirectly exceeding interest rate limits has been significantly compressed. "The previous profit model based on fee splits is unsustainable, as many products targeting lower-tier customer groups exceed interest rate ceilings after merging billing, making it challenging for institutions to balance compliance with profitability," remarked a scenario-based lending support representative to the Financial Association. "Based on the current regulatory framework, the new personal loan regulations, alongside lending support regulations, payment channel rectifications, and marketing norms, will form a synergistic effect, collectively driving the personal credit market toward transparency and standardization," the aforementioned lending support individual stated, believing that industry competition is shifting from "traffic marketing" to "precise pricing." Future competitive dimensions will center around funding costs, risk control accuracy, scene depth, and compliance thresholds, with past traffic battles giving way to comprehensive capability competitions. This article is sourced from the Financial Association, authored by Gao Ping; edited by Zheng Yuyang.