On The Legal Issues Of Auto Financing Company

Auto financing company, refers to the non-bank financial institution aiming at providing finance service to the domestic auto buyers and sellers under the China Banking Regulatory Commission (CBRC)'s approval. With Administrative Rules Governing the Auto Financing Company and Detailed Rules for the Implementation of that being launched by CBRC in 2003, auto financing companies have come into being in china. Unfortunately, it developed in a slow and undulating way largely due to the limited source of finance, the strict scope of business and the prohibition of branches setting. In 2008, CBRC revised the administrative rules to eased restrictions requirements, which resulted in a sharp surge in automobile financial company's turnover. However, the development of Automobile financial company still blocked because of the high Market admittance, narrow financing channels and relatively tight business scope control. What's more, bad self-regulating ability, imperfect individual credit system in automobile consumption credit and lack of regulatory law of personal credit system are also the reason for the stunted growth. Automobile financial company has developed for more than a hundred year in foreign countries, especially countries and districts like the USA, Japan, EU and Taiwan, all having perfect administrative systems. In order to promote the development of the auto finance business in China, We should adopt advanced regulatory experience of other countries combined with the situation of our own country, by moderately relaxing automobile financial company's market admittance, diversifying business scope and financing channels, further optimizing its management system, and improving the risk prevention mechanism of consumer credit. Meanwhile, we should establish the personal credit system, and perfect the legal system of consumer credit as well.