The popularity of P2P encounters difficulties in protecting the rights and interests of financial consumers

Author: Kangaroo

According to the "Monthly Report of P2P Online Lending Industry in November 2015 " released by Wangdaizhijia , the overall transaction volume of the P2P online lending industry reached 133.124 billion yuan in November , up 11.26% from October , about 4.2 times the same period last year ( 31.324 billion yuan) , and the P2P industry continued to maintain a high growth state. At the same time, the number of problematic platforms also showed a rebound trend. Recently, industry events including Xinliyuan's escape and the Ezubao incident have frequently set off social media. The growing expansion of the P2P industry and the successive risk events have made the protection of financial consumers' rights and interests particularly prominent.

Investors’ embarrassing rights protection situation

Due to China's special national conditions, many investment and financial management fields, including P2P, have embarked on the road of rigid redemption. Taking P2P as an example, if we count the two or three thousand platforms that currently exist, we will find that most of them have a promise of principal and interest protection and various explicit or implicit fund protection measures marked in a prominent position on the website. However, after the problem occurred, these promises and measures did not play the role of the claimed protection. The flashy promises made it very difficult for investors to defend their rights when the problem occurred. Investors can only take helpless measures such as besieging the government and relevant departments. Therefore, we saw that after the Pan Asia redemption crisis, in which 220,000 investors were deeply trapped, a large number of petitioners gathered at the China Securities Regulatory Commission and Shanghai Jing'an Temple hoping that they would make the decision. After the incident of Fortune Cornerstone, investors flocked to the Hubei Provincial Letters and Calls Bureau to defend their rights and demanded that the government intervene in the matter.

A large number of investors collectively defended their rights, but the relevant government departments either avoided answering or passed the buck. After the news that MMM community was suspected of pyramid selling broke out, the China Banking Regulatory Commission, the Ministry of Industry and Information Technology, the People's Bank of China, and the State Administration for Industry and Commerce issued risk warning announcements many times in succession, encouraging citizens to report criminal clues, but a large number of clues were faced with a situation where there was no way to complain after being submitted. When the reporter was reporting as an enthusiastic citizen, the Public Security Economic Investigation Brigade refused to accept the case on the grounds that there were no victims, no organizers, or that matters from other places were not their responsibility; the Industrial and Commercial Inspection Brigade believed that it was a criminal case, but said that it had no authority to investigate, and suggested that it would be better to go to the public security, or suggest calling the mayor's hotline; the police station accepted the report, but could only issue warnings within its jurisdiction first, and ultimately the road for investors to defend their rights could only get longer and longer. So there was the article in the People's Daily: "Reporting MMM Community, Why is it so difficult!" The problems of the government and regulators exposed in the process of investors' rights protection are worth our reflection.

P2P regulation is in name only and difficult to implement

It has been four months since the central bank and ten other ministries and commissions officially released the "Guidance on Promoting the Healthy Development of Internet Finance". Although the P2P industry now has a "programmatic document" for supervision, the framework-based guidance does not provide a detailed explanation of the subdivision of the powers and responsibilities of the regulatory authorities, and the general definition is difficult to implement at the operational level. It is difficult to effectively protect the vital interests of financial investors with just a "Guidance", and the mutual buck-passing between departments is a clear proof of this.

At present, the domestic financial regulatory system is still layered, industry-specific and subject-oriented. It is difficult to meet the actual needs of supervision under the current situation of mixed operations with cross-integration of business in the financial industry. The stock market crash in the middle of this year fully exposed the problems in supervision, and the problems of regulatory vacuum and closed loop of information flow between regulatory agencies are particularly prominent. Take the P2P industry as an example. It is reasonable that liability products should be managed by the CBRC, and equity products should be managed by the CSRC. However, the "Guidance Opinions" generally classify online micro-loans as CBRC supervision. At present, the overall product nature of the online loan industry has long been separated from the qualitative nature of information intermediaries, and the business model is running wildly in the direction of traditional human asset management. Under such circumstances, even the CBRC supervision is difficult to operate. In addition, whether to include the government in the bottom-up model of financial products is also controversial. Han Mingliao, CEO of Zhongyidai, pointed out that the iron law of finance lies in the matching of risks and returns. Protecting investors is not to protect them with rigid redemption, but requires detailed information disclosure to let them understand the true meaning of the product. Using taxpayers' money to back up is contrary to the spirit of social contract. Some time ago, the idea of ​​establishing a "super regulatory committee" became popular in academia and related practitioners. This also shows that it is what everyone wants to do to reorganize and improve the regulatory system to adapt to actual needs.

At present, the entire industry is looking forward to more operational P2P regulatory details, and the regulatory details have been further improved after being sent back by the State Council for redoing. According to Caixin.com, the P2P management method is already in the internal review stage and will be publicly solicited for opinions this month. The overall idea of ​​the P2P management method is to implement a negative list system. At the same time, the local financial office will be responsible for risk prevention and disposal in accordance with the principle of " who approves, who supervises ". This means that P2P will not issue licenses, but will adopt a management method similar to that of the Small Loan Association to promote industry self-examination, self-correction, cleanup and rectification. Although some of the regulations are not satisfactory, it is a good start after all. I believe that the final regulatory details will fully consider the current industry reality.

Financial consumers are participants and cornerstones of the financial market, and are the main body of financial institutions' services and financial consumption. Only when their basic financial rights and interests are protected can the financial market continue to develop healthily. In November this year , the General Office of the State Council issued the "Guiding Opinions on Strengthening the Protection of Financial Consumer Rights and Interests", which is the first institutional document at the State Council level in China. It is a basic document in the field of financial consumer rights protection and will play an important role in promoting the protection of financial consumer rights and interests in China. Once the documents with actual regulatory nature, including the P2P regulatory details, are issued as scheduled, the current situation where consumers have no way to protect their rights is expected to be improved.