KUALA LUMPUR, Aug 22 — The Consumer Credit Bill 2025, a landmark piece of legislation aimed at regulating Malaysia’s rapidly growing credit services industry, gained passage in the Dewan Rakyat in July and is anticipated to be gazetted before the year’s end.
The Bill was tabled after years of calls to regulate services like “buy now, pay later” (BNPL), which have surged in popularity since the Covid-19 pandemic.
BNPL transaction volume, for example, quadrupled from RM2.3 billion in the first half of 2023 to RM9.3 billion in just two years, prompting warnings about potential harm to vulnerable consumers and the risk of rising household debt.
To oversee the new Consumer Credit Act (CCA), policymakers will establish the Consumer Credit Commission (CCC), expected to be formed once the law takes effect, possibly by January next year. Here’s what you need to know about the new regulatory body.
What is the Consumer Credit Commission (CCC)?
The CCC will be the primary authority responsible for licensing and regulating credit service providers that are currently unregulated.
Initially, its mandate will cover six key industries: “buy now, pay later” providers, factoring companies, leasing companies, impaired loan buyers, debt collection agencies, and debt counselling and management agencies.
There are discussions that the CCC could eventually take over regulatory powers for hire purchases, moneylending, and pawnbroking, which are currently overseen by the Domestic Trade and Cost of Living Ministry and the Housing and Local Government Ministry.
What are its main functions?
The CCC’s role extends beyond just regulation. Besides ensuring that credit providers comply with the law, the commission will also act as a policy think tank to spur the consumer credit industry’s growth.
It will have the power to compel industry players to submit data, which will be used to advise the government on national policy related to consumer credit.
How will the CCC help consumers?
The commission’s overarching mandate is consumer protection. It is empowered to receive and investigate complaints and, if necessary, penalise any credit provider found to have breached the “fair practices” provisions of the CCA.
For example, if a BNPL user feels they have been unfairly charged with hidden fees or that the repayment terms are exorbitant, they can file a complaint with the CCC to trigger an investigation.
Penalties for violations of the Act can include fines of up to RM5 million or imprisonment.
What are the CCC’s limitations?
For now, the commission’s jurisdiction is limited to the six industries mentioned above.
This means the CCC is not yet empowered to investigate complaints regarding hire purchases or loan sharks (“Ah Longs”), even if they are related to consumer credit.
Complaints about hire purchases and moneylending must still be directed to the respective authorities, at least until a future phase when the CCA is amended to expand the CCC’s powers.
