Toward the end of 2006 the Diet enacted the Money- Lending Business Law to help solve the problems of consumers who have multiple debts. Since then, the government has taken steps to impose restrictions on the methods of collecting loans and to raise the barrier for entry into the consumer loan business. On June 18, even stricter rules went into force due to a revision of the law.
The revision consists of two key points: (1) lowering the ceiling on interest rates set by the Capital Subscription Law from 29.2 percent to a range of 15 to 20 percent, depending on the size of loans, and (2) banning, in principle, any loan that exceeds one-third of a borrower's annual income. The revision covers consumer loan firms, credit card firms and cashing services of credit sales firms. To take out a consumer loan, no-income housewives will be required to show their income-earning husbands' written consent and income certificates.
Although the revision is aimed at solving the multiple-debt problem, the strict rules may create a situation in which many people who used to be able to borrow money without difficulty may become unable to borrow money.