MONEYLENDERS BILL

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MONEYLENDERS BILL: 5.45 pm

Order for Second Reading read.

The Senior Minister of State for Law (Assoc. Prof. Ho Peng Kee): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the Moneylenders Act was enacted in 1959, about 50 years ago. Amendments have been few and far between, primarily focusing on enhancing the provisions that tackle unlicensed moneylender or loansharking. The Act was intended as a piece of social legislation to safeguard what we would

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call "small-time borrowers" from unscrupulous moneylenders. Hence, its chief concern was the charging of exorbitant interests. The lenders then were also essentially small-scale operators.

Sir, the moneylending landscape has changed significantly over the years. As at end of last year, there were 169 licensed moneylenders. Whilst the majority were sole proprietors, there were also partnerships as well as companies. A total amount of $98 million was lent last year to a range of borrowers in varying amounts.

Sir, as business modalities evolved, the framework of the Act became outdated. In response, the approach taken was to exempt some categories of lenders from its ambit. These are termed "exempt moneylenders" and include companies that lend solely to businesses or to their own staff. The number of exemptions given over the years has increased, standing at 188 at the end of last year.

Hence, the Ministry of Law and the Registry of Moneylenders conducted a holistic review of the Act to see how the moneylending regime can be improved. These amendments are a result of this review. They take into consideration the feedback we had received from a public consultation on an earlier version of the Bill.

Sir, in view of the comprehensive changes, the Bill repeals and re-enacts the Moneylenders Act. In general, these amendments will introduce a more flexible and progressive approach to the regulation of moneylending to keep pace with the modern credit economy, whilst taking into account the social policy on access to credit; in other words, a modern framework that serves to strike a proper balance between regulating licensed moneylenders and safeguarding the interests of borrowers. Specifically, they clarify the scope of moneylending activi

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ties to be licensed, modernise moneylending operations, enhance protection for borrowers, tighten the regulatory framework, giving the Registrar more powers to act against errant moneylenders and introduce new measures to tackle unlicensed moneylending.

Let me now take the House through the salient features of the Bill.

Clarifying the scope of moneylending

Part I of the Bill clarifies the scope of moneylending. All moneylenders who grant secured and unsecured loans to members of the public will be licensed and regulated. Some of the moneylenders previously granted exemptions but who come within the scope of moneylending will now be regulated under the new licence regime. In addition, the list of excluded moneylenders has been expanded to cover, for example, lenders who grant solely staff loans or lend solely to corporations, limited liability partnerships, trustees of REIT, and accredited investors within the meaning of section 4 of the Securities and Futures Act. Excluded moneylenders will not be required to apply for a licence or an exemption under the Act.

Sir, clauses 35 and 36 empower the Minister to grant or extend exemptions from any or all of the provisions of the Bill, to impose or vary conditions of exemption, and to revoke the whole or part of any exemption, where necessary, and to grant class exemptions.

Under the new framework, the Minister's power of exemption will be of a residual nature, for loan activities that may not be specifically excluded but for which we have no intention to regulate, eg, loans to high net worth individuals for transactions which do not fall within the social policy concerns. The changes will

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provide greater certainty to the industry, and remove the need for companies to apply for exemptions for lending activities which do not need to be regulated.

Modernising the licensing regime

In tandem with the new framework, the licensing regime has been modernised.

Owing to its origin as a piece of social legislation to regulate small operators, the current Act has tight controls on location. In recognition of the function of moneylending activities in the modern credit economy, licensed moneylenders will be allowed to operate branches. In line with allowing licensed moneylenders to operate from more than one location, clause 10 requires a person to obtain the approval of the Registrar to carry on moneylending business at any place. The circumstances under which the Registrar will not grant his approval, and may revoke or suspend any such approval, are also set out.

Sir, the Act currently imposes severe restrictions on advertising by licensed moneylenders. This is an unnecessary restriction in today's context and will be lifted under the Bill. With more information in the marketplace, borrowers will be able to make better-informed decisions. Nevertheless, any advertisement must be accurate and should not mislead. Hence, under clause 16, it is an offence for a licensed moneylender to knowingly or recklessly issue or publish any advertising or marketing material in any form that is false or misleading. The Registrar may issue relevant directions to regulate advertising and marketing activities.

_Enhancing the Registrar of Moneylenders regulatory powers
and giving greater protection to borrowers _

Sir, at the same time, the Act gives greater protection to borrowers and

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strengthens the regulatory framework and enforcement tools available to the Registrar.

On giving borrowers greater protection, certain requirements have been sharpened. Clause 19 requires a licensed moneylender to inform a borrower or his agent in writing, before the grant of a loan, of the terms and conditions of the loan. Clause 20 requires the licensed moneylender to provide a written loan contract to the borrower, and for the contract to be explained in a language that the borrower understands. At the Committee stage, I am making an amendment to extend this protection to a surety, if any, which was omitted as a result of a drafting oversight. Clause 21 requires the licensed moneylender to supply statements of accounts to borrowers in accordance with the specified requirements. One such requirement will be that borrowers must be furnished a statement of account without charge at least twice a year. Clause 17 prohibits the grant of loans if the borrower had not first applied in writing to the licensed moneylender for the loan. This will deter unsolicited loans.

Clause 22 empowers the Minister to prescribe the types or amounts of the costs, charges and expenses that a licensed moneylender may impose in respect of every loan granted by him. Any amount other than or in excess of the permitted fees will be unenforceable and may be recovered by the borrower, as a debt or by way of set off against the loan and any interest, late interest and permitted fees payable.

Sir, on enhancing the regulatory framework and enforcement tools, clause 25 gives the Registrar or an officer authorised by him the power to enter premises used or believed to be used by a moneylender to carry on business in order to inspect the premises and any book, record or other document found on the

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premises. The moneylender will also be required to provide to the officer information or documents. Clause 5(4) empowers the Registrar to issue a licence with conditions and clause 26 empowers him to issue directions to a moneylender, whether licensed or exempt under the Bill, for the carrying out of the provisions of the Bill.

Clause 37 empowers the Minister to make rules for the purposes of the Bill, which may apply to any moneylender, whether licensed or exempted under the Bill. The rules may be general or relate to specific classes or descriptions of moneylenders, and may make different provisions for different classes or descriptions of moneylenders. Clause 23 gives the Minister the discretion to prescribe the maximum rate of interest that a licensed moneylender may charge for any loan granted. To that end, the Minister intends to prescribe rules to retain the existing interest rate caps for personal loans of $3,000 and below so as to give some protection to borrowers with small or no income. At the same time, for other cases where the rules do not apply, clause 23 authorises a court to re-open a moneylending transaction and give the borrower relief where the interest is excessive and the transaction is unconscionable or substantially unfair.

Tackling loansharks

Finally, Sir, the Act introduces two further measures to counter loansharking, strengthening the slew of measures we have already put in place.

The first is this. Currently, persons who are convicted under section 33 of the Act for harassment activities which result in property damage or persons being hurt are liable to be caned. In contrast, the instigators of such harassment activities are not liable for caning under that section. Clause 28 re-enacts section 33, but extends the

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punishment of caning to those who instigate or direct the harasser to commit the acts of harassment. There is no reason why those higher up the hierarchy of a loansharking syndicate should not also be similarly punished for the despicable acts of those they use to carry out their directions. They are equally, if not, more culpable.

The second measure is to extend the existing presumption in section 35C, whereby a person whose bank account or ATM card is used to collect debts by an unlicensed moneylender is presumed to have assisted in the conduct of the business of the unlicensed moneylender. Clause 14 will extend the current presumption to cover a situation where telecommunications services such as a handphone or pager line are so used. This is intended to disrupt the infrastructure of loansharking syndicates, thereby hampering their attempts to evade detection.

Sir, I beg to move.

Question proposed.

Ms Ellen Lee (Sembawang): Mr Deputy Speaker, Sir, although I support the Bill, I have concerns. This Bill comes at a time when our economy is rapidly slowing down and a tight credit crunch is imminent. There will be much more moneylending activities, both legal and illegal.

This Bill will remove restrictions on moneylenders operating from only one location, and moneylenders can now advertise. I am concerned that this relaxation will signal that moneylending activities are now decontrolled. Small-time borrowers, who always rely on the Government to control moneylenders, may then become complacent and enter into such transactions under a false sense of security. Moneylenders or their agents

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may think likewise and encourage borrowers to seal the deal. It becomes just like the financial products sold by financial institutions which have shown how vulnerable people are when it comes to money sense. Notwithstanding the safeguards requiring the moneylender to give the borrower or his agent a written notice of the terms and conditions which the borrower or his agent must sign and acknowledge, the difficulty is whether to allow the borrower or his agent to repudiate the acknowledgment when they claim that they were not given a chance to read or understand the terms and conditions but that they were forced to sign the acknowledgment, otherwise no loan would be granted. The proposed new rules on unsecured personal loans to the public, applicable to moneylenders, must safeguard our people from the curse of mounting debts. Even as interest rate caps will only be prescribed on personal loans up to a stipulated amount, there must be even more pro-active measures to protect and safeguard the interest of the vulnerable low-income, low-education group and the elderly. They need the financial help and the loan, but they also need financial education.

Under the Bill, all moneylenders who grant secured and unsecured loans to the public will be licensed and regulated. Arising from this approach, exempt moneylenders who currently operate under an exemption to grant personal loans will be licensed and regulated. This is a positive step forward to ensure that such institutions are well regulated and do not ultimately affect our social compact and fabric. As such, I urge the authorities keep close tabs on the lending activities of these institutions, investigate and rein them in as soon as complaints of fraudulent or malpractice are reported.

I want to touch on the pervading issue of illegal harassment by loansharks. At the last sitting on 21st October 2008, DPM Wong Kan Seng replied in writing to

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a question from my parliamentary colleague, Mr Lim Biow Chuan. He mentioned that the number of illegal loanshark harassment cases is on the decline. Police have also taken proactive measures to tackle the problem on the ground. DPM Wong explained that whilst some progress is made, the problem of illegal money lending is not easy to solve. Loansharks evolve their modus operandi to elude detection and arrest, and syndicates are difficult to break down. He admitted that breaking down the entire organisation is a painstaking and laborious process.

I sincerely hope the amendments will arm the law enforcement agencies with added muscle to deal with the harassment. On my house-to-house visits, I have met some new owners of resale HDB flats and their neighbours who have been victimised by the loansharks’ runners. These innocent residents’ mental torture, their fear for the safety of their young, women and elderly alone at home and the attendant sense of helplessness are very heart-wrenching. They must not be made to suffer the default of the irresponsible borrowers by bearing the indignity of having acrylic paint splashed on their doors and windows, and graffiti in the lifts and common corridors shaming the innocent occupants of the unit and their neighbours. These unfortunate victims and I are heartened that tougher punishments, including caning, will be introduced to send a deterrent signal to illegal loansharks who think and behave as if they are above the law because they have succeeded in evading arrests by using runners. I sincerely hope that the Police, with the help of the community, can continuously monitor the situation and respond quickly enough to curb illegal loansharks’ harassment tactics.

Police presence at the scene is reassuring to these victims that the police are taking their complaints seriously and police advice on how to protect the victims against recurrence of the harassment

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tactics would go a long way to deliver the message that the Police do care.

With that, Mr Deputy Speaker, Sir, I support the Bill.

Dr Fatimah Lateef (Marine Parade): Mr Deputy Speaker, Sir, I rise in support of the Bill.

Many of us would have heard of some "horror" stories pertaining to illegal moneylending and loan sharks' activities, example, spray painting of indecent words, snipe remarks and threats of all forms, including to life and limb.

This Bill is indeed timely and necessary especially in the face of the global credit crunch that we are facing today. It serves as a social legislation as it will help to put checks and balances in place to safeguard borrowers from unscrupulous moneylenders who charge exorbitant interest rates. It will also bring the business practices in line with the market practices of established financial institutions.
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Sir , I have some observations and a few issues to raise:

Firstly, this Bill helps to define the term "moneylender" clearly. It excludes persons licensed, approved and regulated by the Monetary Authority of Singapore, persons who grant staff loans and corporation loans. These persons are governed by the Securities and Futures Act and this definition is important as it prevents misperception, in particular when it comes to substituting the term with more colloquial ones. Moreover, when dealing with the law, these definitions would certainly have to be very clear.

Sir, I also am in support of the stiffer penalties, which is hoped to be a deterrence. I also note the allowances made for flexibility.

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Clarification on section 5(5)C: a deposit of $20,000 for each place of business to be licensed – does this mean that if a person has a current existing moneylending business and he hopes to open up a new one after this Bill is passed in Parliament, he would then have to pay $20,000 each for both the existing as well as the new premises? Will the owners be exempted from this payment for the existing businesses or shops, which may have already been given prior licence before this Bill is passed?

Section 13: Publication of Lists - I support this move as it will provide a useful list of information for the public utilising the service. Of course regular interval updates will be relevant, and I would like to ask the Minister if the listing will be electronic or in the form of a hard copy register.

On the use of advertising and marketing, with the more relaxed criteria that we are going to have now, I would like to suggest that the authorities come up with some guidelines or recommendations on the acceptable range of interest. This will certainly be useful to safeguard consumers.

Section 21: On the required statements of accounts, loan documents and receipts, can I suggest the Ministry come up with a framework for submission and thus achieve standardisation of the submitted data?

Section 25: Pertaining to the Power to inspect – I also would like to suggest that this should be done without prior information and warning, especially as we realise the potential for abuse and chances of "sliding down the slippery slope" with such businesses.

Section 26(2): General Power to issue directions and service guide to assist

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moneylenders on the process of documentation, preparation of cautionary statements, drawing up of agreements and other relevant paperwork – perhaps the Ministry can even consider a startup course or workshop, which may be made a prerequisite for those applying for new licences. This can serve as a platform to share and ensure understanding of the rules, especially those stipulated in section 37.

Sir, this Moneylenders Bill will certainly enhance the licensing and regulation of moneylenders providing all forms of services and loans to the public. It will serve to keep a check on the industry through the robust licensing and regulatory regime but, at the same time, relax certain current controls to facilitate the business in a modern credit economy. Let us hope that the very colourful moneylending business we have here achieves a more regulated approach with greater respect for all concerned.

Assoc. Prof. Ho Peng Kee: Mr Deputy Speaker, Sir, I thank Ms Ellen Lee and Dr Fatimah Lateef for speaking in support of the Bill. They have concerns and queries which I will now address. Firstly, they focus on the impact these amendments will have on the moneylending industry as a whole; secondly, the proper regulating of moneylenders; thirdly, ensuring that borrowers would not be taken advantage of; and fourthly, our fight against illegal moneylending or loanshark activities. Dr Fatimah also has got some specific queries on the provisions themselves.

Ms Lee is concerned that with these amendments, more people may let their guard down and borrow, perhaps, blindly from moneylenders. Sir, I do not expect this to happen as there are checks in place, which I will set out later. But, first, let me say that we should remember that people with no or low income will at certain points in time need cash quickly to meet an urgent and a genuine need. In

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other words, they too will need access to credit. Banks are not likely to lend to them. So some turn to moneylenders; others to pawnbrokers, others maybe to relatives and friends and, indeed, unfortunately, some also turn to unlicensed moneylenders or loansharks. Now, these amendments will help these people. Indeed, it is my hope that by establishing the moneylending industry in a modern setting, less people will resort to borrowing from loansharks.

Now, another point is that with the global credit crunch and economic uncertainty, moneylenders will be more risk-averse and cautious in their lending. Any increase and demand for loans from members of the public will therefore not necessarily be matched by an increase in supply of loans from licensed moneylenders. In other words, the prudent approach in lending on the part of licensed moneylenders, which is now already the case, will likely continue. What is important is that the borrowers must correspondingly exercise discipline in borrowing.

Next, even with the relaxation on advertising and locations, let us be clear, I think Ms Lee said whether this may lead to perception that we are decontrolling the industry. This is not the case. Notwithstanding the relaxation on advertisements, there will still be restrictions. As I have said, the Registrar of Moneylenders would issue directions against advertisements and marketing materials which are false or misleading or which induce the public to borrow money for inappropriate purposes or to induce them using unethical or unscrupulous methods. In other words, to set out the rules and empower the Registrar to do more in this area. Indeed, in the Bill itself, as I mentioned in my speech, there would be provisions to prohibit moneylenders from publishing any marketing or advertising materials which are false or misleading. So I think this should address

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both Ms Lee and Dr Fatimah's concerns. Still, Sir, notwithstanding this opening up on advertisements, I do not expect that the smaller and more traditional moneylenders will want or need to advertise widely, as my understanding is that the business is generated mainly through word of mouth introductions. They take a conservative approach because they lend their own money. There may be the bigger ones who want to tap this modern setting and may want to advertise. As I have said, the Registry of Moneylenders (ROM) will monitor how this is carried out. So, how the advertisements are cast, I think that is important.

On whether occasions will proliferate, whilst moneylenders will be able to set up branches, each branch will require a fresh deposit of $20,000. That is a new requirement under the Bill. This is a query Dr Fatimah has. Moreover, every place of business has to be approved by the Registrar. Hence, whilst there is some freeing up, it is not without restraints. As for existing moneylenders, they would only have to place a deposit which may take the form of a banker's guarantee when they next renew their licence. I think that is the point that Dr Fatimah made.

This brings me to the next point, which is that the Registrar's powers have indeed been enhanced under the Act in other ways to ensure that licensed moneylenders conduct their business in a proper manner and also to safeguard borrowers' interest. So this should assure Ms Lee, who urges that the authorities keep close tabs on the lending activities of moneylenders. Indeed, as Dr Fatimah suggests, ROM officers can inspect the moneylenders' premises at any time without any prior notice or warning and, overall, as I have said, sentences for offences committed by licensed moneylenders have been revised upwards and brought up to date. So, in that sense, the

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Registrar will have greater powers to ensure that all lending is done properly.

Now, also, there were concerns raised as to whether unwary borrowers would be taken advantage of. Well, as I have said in my speech, affording protection to borrowers is a key consideration of this Bill. I had mentioned some safeguards already in my speech which include upfront disclosure of the terms and conditions of the loan and also an issuance of a note of contract to the borrower, which is explained to him in a language that he understands. In fact, the note of contract will contain an advisory to the borrower that he is not to sign the note if the entries are not properly filled in and to repay the loan promptly in order to avoid incurring additional charges. Furthermore, the Registrar intends to require moneylenders to ask the borrower in a loan application form whether he has existing loans from other moneylenders, banks or other financial institutions. This would act as a check against borrowers over-extending themselves by taking multiple loans from different moneylenders and, on top of all these safeguards, moneylenders would also be prohibited from granting unsolicited loans. All these requirements will help ensure that the transactions between borrower and lender are properly entered into.

On Dr Fatimah's suggestion to set out an acceptable range of interest, let me reassure her that borrowers of small amounts, like I have said, will continue to be protected as there will be an interest rate cap, which will be the current one, 18% per annum for loans $3,000 and below. Now, interest rates for loans above $3,000 will be lifted, which is a practice in line with the market. So, like other financial institutions, I think we should let the market decide what is the

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appropriate interest rate for these higher value loans.

Sir, these amendments will put the moneylending industry on a firmer footing, ensuring that moneylenders conduct themselves in a fair and transparent manner. But I think the point to note is that borrowers themselves have to act responsibly. First of all, they should not give a chance to loansharks to ruin their lives by borrowing from them. I hope that these amendments would tip the balance for some of them to borrow from licensed moneylenders, instead of turning to loansharks. Secondly, if they really need to borrow money, they should not overstretch themselves in doing so. Thirdly, when they do so, they should seek clarification if they do not understand the terms and conditions of the loan. And, finally, they should make every effort to repay their loan. So the point is, whilst lenders must exercise prudence and responsibility in lending, borrowers should exercise discipline and restraint in borrowing. I think this would put the relationship on the best balance. To further ensure prudent borrowing, MinLaw has been working, in consultation with MAS, to formulate rules that would provide that moneylenders who grant unsecured loans in excess of $3,000, do so only to persons who have sufficient means to repay them and to limit the quantum of the loan which they may extend, based on the borrower's income.

Let me now deal quickly with the remaining points that have been raised. I think Dr Fatimah makes an interesting suggestion that moneylenders be given assistance on documentation processes, ie, paper work; indeed, suggesting even a startup course for new moneylenders. Well, she will be happy to know that currently, ROM already briefs all newly-licensed moneylenders on their duties and responsibilities, including key provisions of the Moneylenders Act and also on the proper completion of the returns to ROM.

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In addition, ROM has been in touch with the Moneylenders Association to see if the Association can conduct courses to help moneylenders acquire skills on modern credit management.

Next, Dr Fatimah asked how the list of licensed moneylenders would be published. This is actually already currently done. The Registry of Moneylenders publishes a list of licensed moneylenders in the Gazette as well as on its website. ROM will continue with this practice to facilitate easy public access and also the giving of information to those who may want to know. A point that Ms Lee makes is public education. I agree with her. That is important. Let us continue to do that. Some have been done currently by MoneySense, a national programme that gives talks and issues materials, but I think more can certainly be done.

On the Minister's power to prescribe different classes of licences as well as make rules to exempt classes of persons from the Act – a query Dr Fatimah has – these are new provisions not found in the Act currently. We have inserted them to provide flexibility for future, not immediate use.

While the Minister may prescribe different classes or description of licences bearing different fees, there is no intention at the present moment to do so. Similarly, whilst the Minister may make rules exempting different classes of persons from the Act, there are no immediate plans to do this. As I said, the power to exempt under the new regime is essentially a residual one. Over time, the Registrar will review the types of moneylenders who apply for specific exemption and evaluate whether there is a need to grant class exemptions. One of the advantages of class exemption is the person exempted will no longer need to apply for exemption every three years.

Sir, finally, let me say something on loansharking, on which both Dr Fatimah and Ms Lee have expressed concerns. I want to thank Ms Lee for supporting the

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proposal to extend caning to loansharks who use others to carry out harassment acts. It will remove the shield the loansharks have been using to carry out their clandestine activities. This addresses a key issue in tackling loansharking, that is, hitting at the core of the problem – the loansharks themselves. This amendment and the other one on expanding the presumption clause to cover use of handphones and pagers will strengthen the existing arsenal of weapons that was introduced since 2005 to counter the loansharking scourge. In this regard, penalties have been enhanced, loansharks have been detained under the Criminal Law Temporary Provisions Act, assets of the convicted loansharks confiscated and passports of loansharks cancelled. We also work with partners, such as HDB and SingPost, to tighten the procedures, deterring opportunities for exploitation by loansharks as well as the procedures for changing the address on one's identity card. So, we will press on.

On our part, Police has kept up the pressure on loansharks through painstaking investigations, intelligence gathering and ground operations, as well as national level operations against syndicates. While the situation has shown some improvement, we will continue to monitor the situation closely and, if necessary, we will introduce further measures to deal with the problem.

But let me reiterate the point I made earlier in this House, which is that loansharking in general and harassment in particular are crimes that are not easy to solve. I know that Police presence is reassuring – I think Ms Lee makes that point – but by themselves they will not overcome this scourge. Indeed, she points to one avenue that I think we can do more on, which is getting the community involved. So CSSP programme – maybe installing CCTVs – being the eyes and ears of Police on the ground, forming Neighbourhood Watch Groups targeted for

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neighbours to help each other to detect and to deter loansharks would be helpful. I think everybody can play a part but, on MHA's part, on my part, we will continue to monitor as we have been doing. I have been taking PQs on this problem. Let us see whether working together we can improve the ground situation especially for our residents. I think Ms Lee talks about that. I also have residents who suffer like that. So, I think the authorities and the community can all work together to do more. But let us also monitor the impact of these amendments because, like I have said, these amendments, hopefully, will help divert some people who may turn to illegal loansharks, to turn to licensed moneylenders.

Sir, I think I have covered the key points raised. I thank both Ms Lee and Dr Fatimah for sharing their thoughts. The Registrar of Moneylenders will certainly monitor the out-working of this new moneylending regime.

Question put, and agreed to.

Bill accordingly read a Second Time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – (Assoc. Prof. Ho Peng Kee).

Bill considered in Committee.

Assoc. Prof. Ho Peng Kee: Clauses 1 to 19 inclusive ordered to stand part of the Bill.

Clause 20 –

The Chairman: Clause 20. Assoc. Prof. Ho.

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Assoc. Prof. Ho Peng Kee: Mr Deputy Speaker, Sir, there are two amendments to clause 20, as indicated in the Order Paper Supplement. As both amendments are related, may I seek your permission to move both amendments together?

Mr Deputy Speaker: Proceed.

Assoc. Prof. Ho Peng Kee: Sir, I beg to move,

(1) In page 20, to leave out from "where" in line 1 to the end of line 5, and insert "any party to the contract for the loan (including a surety) or his agent does not understand the English language, the licensee or the licensee’s agent explains the terms of the note of the contract for the loan in a language that he understands before he signs the note;"; and

(2) In page 20, line 8, to leave out "borrower or his agent", and insert "borrower and the surety (if any) or their respective agents".

Sir, these further amendments to the Bill are necessary to rectify a drafting oversight so as to preserve the current position in the Moneylenders Act which affords protection to a surety in addition to that afforded to a borrower. This is because the current definition of "borrower" includes a surety for purposes of handing to the borrower a note of the contract for the loan, that is to say, not only will the borrower receive a copy of this note, a contract, a surety, if any, will also be given this note. This is, as it should be, as a surety has an interest, indeed every right, in knowing what the terms of the loan/contract are. So, these further amendments will ensure that this is the case. In the same vein, these further amendments will ensure that other than the borrower, if the surety does not understand English, the terms will also be explained to him. Again, this will accord the same level of protection to a surety as is accorded to the borrower.

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Amendments agreed to.

Clause 20, as amended , ordered to stand part of the Bill.

Clauses 21 to 39 inclusive ordered to stand part of the Bill .

Bill reported with amendments, read a Third time and passed.