Research On The Legal Issues Of Consumer Finance Companies

Consumer finance company is to promote consumer demand, and promote stable and rapid economic growth and sustainable Development, which is established by the CBRC. In the end of 2007, China Banking Regulatory Commission began to do some analysis work on the development of domestic consumption, which is great for setting up consumer finance company in China. The international financial crisis had a badly impact on China's export-and investment-led economic, which proves that the consuming is very important for stimulating national economic growth, thus the"Consumer Finance Measures for the Administration of Pilot"(hereinafter referred to as the" Trial Measures ") is published earlier, Where is the introduction of the consumer finance company born. Consumer Finance company, as a financial principal innovation, has its own characteristics in the operation; also there exist a number of risks and problems. Study of legal issues related to consumer finance companies will not only help improve the consumer finance company itself, but also be conducive to the development of China's consumer finance industry. This paper is based on the establishment and development of consumer finance company in China, in order to research how to resolve consumer finance companies in our present legal framework.This paper consists of three parts: introduction, main body and conclusion.Introduction introduces the topic of the origin of this article, an overview of the background, Significance, and operation risks and problems about foundation of the consumer finance companies. The author sets out his own research ideas in the review of existing literature on the basis of consolidation.In the first chapter, the author researches the theoretical basis of consumer finance companies. He introduces the reasons of establishment of consumer finance company; then the author confirms the necessary of the existence of theory of life-cycle hypothesis of consumption, while using of expected income theory and permanent income hypothesis theory to analyze the feasibility of development of the consumer financial; finally, the information collected on the basis of the existing pilot describes the form of consumer finance companies and the legal nature of the formation.In the second chapter, the author introduces the characteristics of operations in the consumer finance company: in the service object, the consumer finance company establish a stable source of income in the low-end individual customers; with personalized credit products, small single line of credit, interest rates and flexible repayment, no need to provide security features in the business model; with the fast approval and convenient services to a variety of features in the operation. Secondly, the author does a comparison about the service of the consumer credit between the consumer finance company and the other financing institutions.In the third chapter, the author discusses the risks and problems in the operation of the consumer finance company, First of all, the consumer finance company, as Consumer credit agencies, faces a credit risk and operational risk; Secondly, the consumer finance company business model exists problems in the high barriers to entry and the narrow scope of business issues, lacks of funding sources; Finally, the legal system of the consumer financial companies is not perfect, the operating environment need to be improved.In the fourth chapter, the author proposes the recommendations of the legal system related to the consumer finance company, in order to resolving the risks and problems in the consumer finance company, by strengthening risk control, optimizing business model, improving the supporting legal system.Conclusion part sorts out the research ideas of this paper, summing up the author's point of view.