The Research On The Legal Regulation Of Internet Private Lending

The appearance of the thoughts of internet+brings the evolution of the economic form and generates a lot ofemerging industry.Internet finance industry has greatly changed people’s lifestyle,enhance the social investment channels and bring benefits to the public and especially those small and micro businesses which have wake position and have difficulties in financing.The internet lending platform which was originated in England in 2005 has brought the development of internet lending business.In the past decade the internet lending business has got rapid development and become a popular investment method in the world.It also has become the major financing channel for the small and micro businesses which have been excluded by those formal financial institutions.A lot of internet lending intermediary institutions have been set up and the internet lending business has got legislation support from countries all over the world.Compares with foreign internet lending business,it didn’t originate from China,but it has got rapid development here.China has been among the top list of internet lending in terms of business scale,the numbers of platforms and the ability of innovation.but the development of nee things will definitely come through the barbaric developing period which is out of order and generate a series of problems.a lot of problems have appeared in Chinese internet lending industry,which will influence the development of this emerging industry.The thesis’s framework is based on the subject construction,the establishment of basic interest of transaction among those subjects and the supervision system of ensuring the transaction,which includes the main framework of internet lending industry.The first chapter defines the related concepts about internet lending industry to ensure the foundation of this thesis.Internet lending belongs to private finance,which is called informal finance abroad.In China some people think that informal finance still includes illegal financeand gray finance,private finance and formal finance together constitutes the financial system of a country.Private finance includes offline private finance and online internet finance,the internet finance includes internet private lending and internet crowd funding.The internet private lending is a kind of finance which was carried out through the internet lending platform,the institutional origin source of the internet private lending is the so called " long tail " Phenomena caused by the financial repression.A part of people who can’t be covered by formal finance can realized the rearrangement of their resources through the internet lending platform,for those lenders,their risks are lowered and their profits are raised due to the sharing of information cost.Due to the above-mentioned reasons and the social promotion to the innovation,the internet private lendingindustry was generated and developed.Compares with traditional private lending,the internet private lending has such characteristic as more extensive subjects and funds,lower financing cost,lower risk,more convenienttransaction,no regional limitation and multilevel legal relationship.The legitimate existence of internet private lending has certain theoretic support,mainly includes the asymmetric information theory in economics,the theory of financial repression,two-dimension theory and long tail theory in economics,embeddingtheory of interpersonal relationship in sociology.On the basis of the above-mentioned theories,various countries confirmed the internet private lending in legislation,represented by those countries as America and England.The second chapter,the regulation to the lenders of internet private lending comes from two parts,the first part is the traditional regulation to the lenders of private lending,the second part is the specialized internet lending legal regulation towards internet private lending.In terms of the type of the lenders,all the countries(regions) regulate that it can be natural person,legal person and other organizations,but when it comes to the the specialized category of professional lender and non-professional lenders,there are different regulations in various countries(regions).the majority of the countries(regions) regulate the access system to professional lenders which requires the investors and related managers with certain quality.As to the capital resource of the lenders,all the countries(regions) generally regulate that the lenders can’t lend money through absorbing the public deposit,but there are different regulations when it comes whether the lenders can carry out finance lending throughformal finance.Current regulations in China regulates thatif capital resource of the lenders is illegal the contract will have no effect,which can not provide effective protection to the investors,the judiciaryshould pay attention to the principle of investors’ protection,and announce the validity of the contract due to the goodwill protection system.various countries(regions) have special regulations towards internet lending lenders to protect the lenders’ right.Firstly,it embodies in those systems which regulate the eligibility(mainly from the regulation of the total assets and single investment amount)and appropriateness of the lenders(which includes that the lenders should have certain knowledge,the platform has the responsibilityto supervise and disclose the information);secondly,the regulation of the borrowers,mainly from the aspects of the credibility and the borrowing amount;thirdly,the regulation towards the guarantee rights.Currently,the establishment of mortgage real rightcan’t be registered under the names of a number of creditors,the scholars suggest that we should establish internet secure claims publicity delegation system,and the internet lending institution can delegate the investors to carry out registration of secure claims and receipt and payment.finally,it embodies in the realization of the litigation right of the investors,it is difficult fornumerous small amount investors to realize their rights through litigation.The scholars suggest that we should establish the litigation right transfer system of internet lending industry,in which the internet intermediary institution will get the creditors’right and realize it to protect the investors.The third chapter,the internet lending transaction needs the inter-mediation of the intermediary institutions,which information intermediary, credit enhancement intermediary and credit intermediary.various countries have prohibited thecredit intermediary,but admitted credit enhancement intermediary,such as third party guarantee,introduce insurance,providing risk cash deposit.China now prohibits credit enhancement intermediary andcredit intermediary,which is not good for the protection of the investors.The legislation should permit the third party to providecredit enhancement for the internet lending intermediary.The actual strength of the internet lending intermediary influences the lending transaction and its interest rate.Various countries have regulated certain access requirements,such as the management of license,the legislative limitation of registered capital,the professionalization of the managers etc.China should go with the tide and accept access system and promote the entry threshold of the intermediary institutions.At the same time,the orderly quitting system of thethe internet lending intermediary is also very important.Various countries have related arrangements in terms of the quitting of the platform,such as the prior arrangements of the quitting plan,the legislative transfer principle of the platform business.As to the self managingrights ofthe internet lending intermediary,many countries have admitted them.From the point of promoting the opportunity to earn profits and right to managing,we should release the injunction and enhance the chance to make profits and better serve the lenders and borrowers;the responsibility of the internet lending intermediary mainly includes the duty to disclose the information,funds trusteeship,education investors and so on.The legislation should explicit the types of the duties and the industry association should carry out the specific requirements.The fourth chapter,the key point of lending transaction is its interest rate.The internet lending interest rate is influenced by the borrowers,the transaction platform,the time limit and the use.When it comes to whether the internet lending interest rate includes intermediary fee or not,in America and other countries,the judiciary practice has admitted that it should be included.Chinese legislation has not made related regulation and judiciary practice in different areas has made different judgement.In order to prevent the platform to raise the intermediary fee and reduce the borrowing interest to realize the goal to disguise the fact of raising the borrowing interest rate,the scholars suggest that we should unified the interest rate criteria,and explicit that the intermediary fee belongs to a part of the interest rate.There are some disputes on the distinguish of productive interest rate and consumption interest rate.Due to the limited political influence to consumption interest rate and its non profit characteristic,various countries have different regulations towards productive interest rate and consumption interest rate,China should follow the trend and regulate different criteria.In terms of the upper limit of the internet lending,currently it can not adapt to the market requirements of the internet lending industry,the unificationof the upper limit will let the investors to assume the breaching contractrisk of those borrowers with low credit,the scholars suggest that we should set up the upper limit of the objective standard of the consumption lending,we should set up the upper limit of productive lending with subjective and objective standard there are still some disputes on whether the usury should get criminal punishment,although in some countries it will get criminal punishment,but a lot of scholars think that criminal law shouldn’t disturb the validity of the civil transaction.Especially due to the fact that the internet lending relates to many people and will hurts many investors’ right,so in internet lending,industry the usury behavior should’t apply the system of criminal punishment.The fifth chapter,the supervision of internet lending is the assurance of the healthy development of the internet lending industry.Various countries have enhanced the supervision on internet lending.There are some disputes on the unilateral supervision or multilevel supervision.The focus of the disputes relies on that the high supervisioncost will influence the development of emerging industry.Currently the internet lending supervision in our country has certain issues as the appropriateness of the supervision institution,the exact responsibility of the supervision institution.from the point of the private finance characteristic of internet lending,the scholars suggest that the supervision institution should transformed from Banking Regulated Committee to local government,establish the supervision system of principle supervision from the supervision institution and high standard industry self-discipline and carry out the system of compulsory membership system.Current strict supervision system has got wide criticism from the domestic and abroad scholars.We should use the English relaxing supervision concept and constantly correct the supervision methods.The main contents of supervision should be focus on the inner management and risk management supervision.At the same time,we should supervise the credit risk of the borrowers to ensure the market information transparency,the market fairness and safety of the customer fund,which needs certain supporting systems.First,we need to build the borrower’s credit risk system,some people suggest building the unified internet lending industry credit platform which should be built by the government and the industry is responsible for providing the information;secondly,we should set up information disclosing system,the industry association is responsible to build high standard information disclosing system;thirdly we should set up supporting customer fund trusteeship system,order the platform to entrust the customer fund to third party to ensure the fund safety;the last but not the least,we should set up supporting internet lending industry disputes resolution institution and internet platform disputes delegation system.