Financial Services, Latvia, Legislation, Loan

Saeima also supported a motion, not included in the original legislation, that quick loan companies would be supervised and controlled by the Financial and Capital Market Commission.

According to the legislation, the daily total loan cost may not exceed 0.25 percent of the principal loan amount. This provision will not apply to loans under EUR 100 and in cases the borrower deposits something as security to take out a loan. The loan repayment period may not exceed three months, Saeima Press Service told LETA.

The total loan cost amount is made up of interest and commission payments, and applicable taxes and fees that the borrower has to pay under the loan contract, except for the cost of notary's services, the Economy Ministry said previously.

The new legislation also stipulates requirements on late interest payments and instances when they are not applicable, and states that lenders will not be permitted to issue quick loans from 11 p.m. and 7 a.m.

The Economy Ministry previously indicated that consumers' complaints about quick loans mostly dealt with overly high interest rates, lenders' refusal to assess the borrower's solvency, disproportionate penalties, and others.