mini-instant loans in the viewer of the regulator

In a press release, the ACPR called to order, without calling by name, some sellers of mini-instant loans. The regulator of the financial sector emphasizes in particular that the fees paid must comply with the regulation of usury.

According to the established expression, the policeman of the financial sector whistles the end of the CPR. In a press release published yesterday, Thursday, March 31, the Authority for Prudential Control and Resolution (ACPR) recalls that only professionals with a license are authorized to market loans of low value. In the viewer, without naming them, the players of the small market of instant miniloans, these loans of a few hundred euros, repayable in the short term and presented as aid, salary advances or breakdown assistance. A product recently imported from the Anglo-Saxon countries, which clearly aims at the millions of French people who end up being discovered every month.

Among the companies that offer this type of product, there are specialized credit institutions, such as Floa Bank, a subsidiary of BNP Paribas that also works, in white label, with the Lydia payment application, or Novum Bank, a Maltese bank that distributes its product in France under the Cashper brand. But still young specialized companies, such as Finfrog or Bling. It is the latter that the ACPR seems to target more particularly. Sherwood, the company behind Bling, does not benefit from any approval and is not listed in the Register of Financial Agents (Regafi). In the current state of things, it is not supposed to market credits, explains the regulator in substance.

Bling suspends its activity

After the warning from the ACPR, Bling announced on April 14, 2022 on its website to “temporarily suspend” its activity at the request of the regulator: “(…) we are in discussion to find, together, a solution that fulfills its partners. your expectations, “explains the service to its users.

Do you practice usury?

The call to order of the ACPR does not stop there. In his press release, he also insists that the expenses of any kind paid by the subscribers of these loans to obtain the sums promised under the conditions announced, even in an accelerated way, must respect the limits established by the prohibition of usury . That is, the maximum rates authorized by the regulations.

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The ACPR here is aimed at the practices of almost all market players. With the exception of Finfrog, which is clearly seen as a good student, all charge, in addition to the cost of credit, the immediate availability of funds, which is at the heart of its promise. Gold these express options are very expensive, in relation to loan amounts: 7 euros, for example, to Bling, for a loan of 100 euros; from 6.90 to 24.90 euros, depending on the loan amount, to Floa and Lydia; much more to Cashper, which takes 30% of the loan amount, or 30 euros, for example, for a loan of 100 euros. The costs considered staggering by the consumer association UFC-Que Choisir, which calculated in April 2021 that the annual percentage rate (APR) of these instant loans varied from 91% at Floa and Lydia to 2234% at Cashper, while the maximum authorized is currently 21.11. % for this category of loans. A discovery that led to the filing of a complaint for deceptive business practices against Bling, Cashper and Floa Bank.

To justify their practices, the actors explain that the cost of the instant transfer should not be included in the APR calculationsince it is an option, the hand of the loan. This is clearly not the opinion of the ACPR. Now it will be interesting to observe the reaction of the companies concerned by this call to order and its impact on their business model.

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