Debt Assignment to Third Parties Only Upon Borrowers’ Consent: Regulator Clarifies
24 August 2020 News
A borrower is entitled to put a ban on his/her debt assignment to third parties
by the creditor. This option shall be included in the individual provisions of a consumer
loan agreement. This is communicated in the Bank of Russia Information
Letter addressed to banks, microfinance organisations, consumer credit cooperatives
and agricultural consumer credit cooperatives.
Based on the findings of the conduct supervision, the regulator revealed instances when
borrowers did not have such options or could not influence the contractual provision banning
the assignment of rights (claims) to third parties despite the fact that such right is stipulated
by Federal Law No. 353-FZ, dated 21 December 2013, ‘On Consumer Loans’. The Bank
of Russia reminds that such conduct is illegal on the part of creditors.
The regulator also explains to financial institutions that the borrower’s ban on the assignment
of his/her debt to third parties shall not influence the possibility to conclude a consumer loan
agreement.
Moreover, individuals have a right to take an agreement away and study it thoroughly at home.
The law allows to do this during five business days, including to make a decision to ban the
assignment of rights to (claims on) the borrower’s debt.
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