As we all know, in the old judicial interpretation of private lending promulgated and implemented in 20 15, "two lines and three zones" were defined, that is, legal debt zone, natural debt zone and illegal debt zone were defined with annualized interest rates of 24% and 36% respectively. Since then, both banking financial institutions and non-bank financial institutions, including consumer finance companies and licensed online lending platforms, have taken the annualized interest rate of 24% as the upper limit of protection. Generally speaking, the upper limit of interest rate protection of financial institutions is consistent with private lending.
Theoretically, referring to the latest judicial interpretation of private lending, there is still room for lowering the upper limit of interest rate protection of financial institutions. According to the principle of capital pricing, the greater the risk, the higher the cost, so as to effectively cover the risk and curb the rise of non-performing loans. However, private lending funds are obviously inferior to financial institutions in basic cost and risk control level. According to the upper limit of interest rate guarantee which is not more than 4 times of the current one-year LPR, taking the LPR in July as an example, the maximum interest rate guarantee is not more than 15.4%. However, in banking financial institutions, the cash overdraft interest rate of credit cards is as high as 18.25%, and the actual interest rate of installment fees is also around 18%, which is obviously unreasonable and contrary to the real economy.
Banking financial institutions have a high interest rate guarantee ceiling, mainly in credit cards. The maximum interest rate of production and operation loans and loans is still lower than the upper limit of interest rate protection of private lending. Take credit cards as an example. For cash overdrafts and overdue consumer bills, the maximum interest rate is 0.5 ‰ per day, and the annualized interest rate is 18.25%. Taking 12 as an example, although the nominal handling fee rate is about 0.7%, the actual interest rate is not 0.7%* 12=8.4% because the principal and interest are equal in each installment, and the comprehensive calculation should be about 18%. Therefore, if the new judicial interpretation of private lending is taken as the standard, it is obvious that some interest exceeding 15.4% is controversial.
Who's in charge of this argument? Of course, the court has the final say. In judicial practice, such disputes are often based on typical cases, and other similar issues also have reference standards. Although the new judicial interpretation of private lending was promulgated and implemented less than 1 month, there have been controversial cases. On August 27th, the court in ouhai district, Zhejiang Province rejected Ping An Bank's interest claim for the defendant's annualized interest rate of 24%, which became the first typical case since the new judicial interpretation of private lending, attracting worldwide attention. Regardless of the results of the second and final trials, it will have a significant impact on the upper limit of interest rate protection of financial institutions, which is a milestone.