The Consumer Credit Bill 2025 was tabled for its first reading in the Dewan Rakyat, marking a step toward stronger consumer credit regulation in Malaysia, The Star reports.
Deputy Finance Minister Lim Hui Ying introduced the bill, with the second and third readings expected in the next parliamentary session.
The proposed legislation aims to establish a Consumer Credit Commission, which will be responsible for regulating and supervising credit businesses across conventional and Islamic finance sectors.
The commission’s primary objective is to enhance consumer protection, promote responsible lending, and ensure fairness and transparency in the credit industry.
The bill covers various credit providers, including moneylenders, pawnbrokers, hire purchase operators, credit sales businesses, buy now, pay later (BNPL) schemes, leasing firms, and factoring companies.
It is worth nothing that BNPL Malaysia accountholders currently stand at 3.7 million customers according to the Consumer Credit Oversight Board Task Force (CCOB).
Similar Islamic finance services, such as Islamic hire purchase, Islamic leasing, and Islamic BNPL, also fall under its jurisdiction.
However, licensed banks, financial institutions, insurance and takaful providers, credit card issuers, and cooperatives are not included in the bill’s scope.
Under the proposed framework, the Consumer Credit Commission will oversee licensing for BNPL providers, leasing and factoring firms, and other regulated credit businesses.
Meanwhile, debt collection services – covering impaired loan acquisitions, debt counseling, and management – will require registration with the commission.
To curb unethical practices, the bill prohibits misleading advertisements, deceptive representations, the omission of essential product details, and coercive sales tactics.
It also bars companies from demanding payment for unsolicited credit products or services.
The Consumer Credit Commission will be tasked with monitoring industry compliance, investigating violations, and imposing penalties where necessary.
It will have the authority to impose fees and monetary penalties for regulatory breaches.
Its board will include an executive chairman, a deputy executive chairman, representatives from the Finance Ministry, Bank Negara Malaysia, and the Securities Commission, alongside up to four experts in consumer credit.
Board members will serve three-year terms, with the possibility of reappointment for one additional term.
Additionally, the bill grants regulatory authorities the power to initiate legal proceedings against individuals or businesses that breach its provisions.
Investigating officers, including those from the Housing and Local Government Ministry and law enforcement, will be appointed to enforce compliance.
If enacted, the bill will introduce a structured regulatory framework for Malaysia’s consumer credit industry, aiming to enhance oversight and protect borrowers from predatory lending practices.
Featured image credit: Edited from Freepik
