New legislative measures against payday loan abuses in Bulgaria
Members of the "Progressive Bulgaria" parliamentary group have submitted a new bill to the National Assembly aimed at curbing abuses in the granting of payday loans. The proposed changes are directed at protecting consumers from aggressive financial practices that often lead to serious indebtedness.
One of the main measures in the document is a total ban on granting loans during nighttime hours. According to the sponsors, many people make ill-considered financial decisions late at night, which traps them in high interest rates and additional fees. The ban is intended to provide clients with time for reflection before signing contracts.
Furthermore, the bill provides for serious restrictions on the franchise model under which many payday loan companies operate. Currently, this model allows companies to expand rapidly, but it often hinders the oversight of their activities and accountability in the event of problems with clients.
Discussions on these changes are expected to begin in parliamentary committees in the coming weeks. Financial experts will analyze how these new rules will affect the market and whether they will succeed in reducing the number of people falling into a debt spiral.
It remains to be seen whether the proposals will gather enough support from the other political forces. If adopted, these changes will alter the way non-bank financial institutions operate in the country and will introduce stricter control over the sector.