The draft law No. 1800 offers determination of organizational, legal and economic grounds for establishment and activity of pawnshops, provision of services by pawnshops and Government regulation and supervision in this field.
In particular, the draft law offers to determine the notions of “pawnshop” and “pawnshop activity.” Pursuant to the document “pawnshops are non-bank financial institutions engaged in allocation of financial loans at own expense or at the expense of borrowed funds against the security of movable property for preliminarily determined period and at specific interest rates, and other activities.”
The draft law envisions the introduction of requirements as to creation of pawnshops in a form of a business entity engaged in provision of financial loans and preservation of property; determination of exhaustive list of other types of activity of pawnshops; determination of requirements to premises pawnshop activity can be rendered in, as well as to loan agreements, collateral agreements and rules of pawnshop activity; and requirements to equity and statutory capital of pawnshops.
The draft law also offers to determine grounds for creation and activity of voluntary associations of pawnshops and to set six-month transitional period for bringing pawnshop activity in line with the law.
During the discussion the necessity for adoption of the draft law was explained with the fact that today huge segment of the financial market occupied by pawnshops is almost non-regulated at the legal level. The said field is now regulated only by by-laws and general legislative acts. At the same time, as at autumn 2014, almost 500 pawnshops and over 4,500 their standalone branches were operating in Ukraine.
Members of the Committee also paid attention to the insufficient level of legal protection of rights and interests of individuals-pawnshop clients.
People's deputies supported the draft law that after its adoption will allow determining place and role of pawnshops in Ukrainian economy and conditions of their activity, facilitate increased level of legislative protection of rights of pawnshop clients.