Latvian Authorities Disagree on the Privilege to Control Quick Loans 0 13

However, for the first time in recent Latvian history, the further fight against bureaucracy has been entrusted not to a bureaucrat or even a politician, but to a "businessman" – one of the leaders of the Chamber of Commerce, Janis Endzins.

There Was Nowhere to Go

It seemed that he, as they say, had the flag in his hands — it is now from Endzins and Co. that specific initiatives to reduce bureaucracy should come. However, it turned out that certain ministries — in particular, the Ministry of Finance — decided to "get involved" themselves and allegedly under the guise of fighting bureaucracy... proposed a meaningless reform.

The proposal from the Ministry of Finance is to take away from the Consumer Rights Protection Center the function of oversight over the non-bank sector (financial companies that deal with various forms of consumer lending) and transfer this function to the Bank of Latvia, which, as is known, controls commercial banks.

Finance Minister Arvils Aseradens, whose department is promoting this "reform," strongly supports this initiative. "I think this is one of the things that should have been done a long time ago. This non-bank part is an integral part of the financial sector. In fact, this non-bank lending came under the oversight of the Consumer Rights Protection Center because there was really nowhere else to put it (the non-bank sector — ed.)," the finance minister stated in an interview with TV-3.

Who Is Lobbying Whom?

In turn, the non-bank sector association sees the hand of commercial banks, that is, competitors, in this "reform." "Initially, this reform was initiated and started by an association representing commercial banks in such a political environment. It is natural that the industry is cautious about the reform proposed by a competing industry," noted the head of the FinTech Latvija association, Tina Luse.

The sharpest criticism came from the Ministry of Economics, which includes the Consumer Rights Protection Center. The Ministry of Economics considers this "reform" hasty and, in general, unnecessary — the Consumer Rights Protection Center is quite capable of overseeing the non-bank sector, which has been actively developing lately and offering lending services to businesses and residents in the regions, which is extremely important for the balanced development of the country. The Ministry of Economics criticized all sections of the information message from the Ministry of Finance, which justified the need for the "reform."

Breeding Bureaucracy

The Employers' Confederation has also come to similar conclusions — about the hastiness and even the unnecessary nature of the "reform." "The Latvian Employers' Confederation has always supported the reduction of bureaucracy in the public sector, and also conceptually supports the direction towards creating unified standards and simplifying oversight in the non-bank sector, however, the proposed solution raises concerns and, according to available data, does not contribute to achieving specific goals — it will not help reduce the administrative burden and simplify oversight of the non-bank sector.

We have many problems in our country that need improvement, but this is not the sector where hasty changes are needed," stated the letter to the government from the Secretary General of the Latvian Employers' Confederation, Kaspars Gorkshs.

This reform has already divided the ruling coalition — it is strongly supported by the "Progressives," while the "Green Farmers" are categorically against it. "New Unity" has so far taken a wait-and-see position. But it is obvious that someone is lobbying very hard for this "reform," as the information report was published... on December 23, and ministries and non-governmental organizations were supposed to send their comments... no later than January 5. That is, taking into account the holidays, interested parties were given only four working days to familiarize themselves with the document!