Consumer Credit Bill 2025 Tabled, Paving Way for New Non-Bank Regulator

Key Highlights:

• Consumer Credit Bill 2025 tabled for its first reading in Dewan Rakyat.
• Bill proposes the establishment of the Consumer Credit Commission (CCC) to regulate non-bank lenders and credit service providers.
• CCC will have powers to impose fees, conduct investigations, and set industry guidelines.
• New licensing requirements for credit businesses, including minimum financial standards.
• Credit providers must assess financial hardship applications before taking legal action.
• Finance minister can grant exemptions based on CCC recommendations.

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New Regulatory Authority for Consumer Credit Sector

Malaysia is taking a major step toward regulating non-bank lenders, as the Consumer Credit Bill 2025 was tabled for its first reading in Parliament on Tuesday.

Deputy Finance Minister Lim Hui Ying introduced the Bill, which aims to enhance consumer protection, regulate credit service providers, and establish the Consumer Credit Commission (CCC) as the main regulatory body.

The second reading of the Bill is scheduled for the next parliamentary session.

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Key Functions of the Consumer Credit Commission (CCC)

According to Clause 7 of the Bill, the CCC will be responsible for:

• Advising the finance minister and government on consumer credit matters.
• Ensuring ethical conduct among credit providers.
• Regulating industry practices and setting standards.
• Enforcing penalties and conducting investigations into non-compliant entities.

Meanwhile, Clause 8 grants the CCC broad regulatory authority, including the power to:

• Impose fees and penalties on industry players.
• Conduct inspections and investigations into consumer credit activities.
• Develop and enforce guidelines to protect borrowers.

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Stricter Licensing & Consumer Protections

The Bill introduces new licensing requirements for businesses operating in the credit sector:

• Clause 41: Anyone seeking to operate a credit business must apply for approval from the CCC or a designated registrar.
• Clause 44: A minimum financial requirement must be met before a license can be granted.

Additionally, the Bill provides stronger protections for financially distressed consumers:

• Clause 86(4): If a borrower applies for financial hardship assistance, the credit provider must assess the application before taking any legal action.
• During this period, creditors cannot initiate lawsuits, enforcement actions, or any other legal proceedingsagainst the borrower.

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Ministerial Exemptions & Oversight

Under Clause 127, the finance minister—acting on CCC’s recommendations—will have the power to grant exemptions from specific provisions of the Act.

However, if the exemptions involve areas regulated by other ministries, the finance minister must first consult with the relevant authorities, including:

• Ministry of Domestic Trade and Cost of Living
• Ministry responsible for cooperative development
• Ministry of Housing and Local Government

This ensures cross-ministerial coordination and avoids regulatory conflicts.

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What’s Next?

The second reading of the Bill will determine whether it progresses toward becoming law. If passed, the Consumer Credit Commission (CCC) will take full regulatory authority over non-bank lenders, setting new standards for the industry.

The move signals stronger consumer protection policies and a push toward responsible lending practices in Malaysia’s financial sector.