Ping An Bank’s Wenzhou branch, which has recently attracted much attention from the financial market, has reversed its final trial in the financial loan contract dispute. On the 12th, the Wenzhou Intermediate People’s Court announced that in a financial loan contract dispute with the borrower Hong, the loan interest rate of Ping An Bank’s Wenzhou branch was not limited to the requirement of “4 times the one-year LPR” and supported the requirement. The loan interest in the case is calculated and collected at a monthly interest rate of 2% or 24% annually.
Picture source: Wenzhou Intermediate People’s Court” WeChat public account
Prior to this, the People’s Court of Ouhai District, Wenzhou City, Zhejiang Province ruled that the loan, interest, and overdue interest that Hong must pay to Ping An Bank’s Wenzhou Branch should be four times the LPR for the same period. Calculate, not the 24% annual interest rate advocated by the bank.
It is worth noting that according to public reports, the case was prosecuted on July 14 and was heard by Ouhai Court on August 27. Just one week before the hearing, the Supreme Law issued the newly revised “Regulations on Several Issues Concerning the Application of Laws to the Trial of Private Lending Cases”, and decided to determine the rate of private lending based on four times the one-year LPR issued on the 20th of each month. The upper limit of judicial protection. According to the calculation of the latest LPR quotation, the current judicial protection ceiling interest rate is 15.4%.
Previous situation: New regulations on private lending
The court rejected the bank’s 24% interest rate appeal
In September this year, a “Civil Judgment of the People’s Court of Ouhai District, Wenzhou City, Jiang Province” was shown to arouse widespread concern in the industry.
The facts of this judgment involved a dispute over a financial loan contract between Ping An Bank’s Wenzhou Branch and the defendant Hong XX.
The facts of the case show that on July 4, 2017, the defendant Hong Moumou signed a “Personal Credit Loan Contract” with Wenzhou Branch of Ping An Bank, borrowing 210,000 yuan from the bank, the loan period is 3 years, the monthly interest rate is 1.53%, and the repayment The method is to repay the principal and interest on a monthly basis. If it is overdue, the bank has the right to accumulate and collect penalty interest for the overdue amount in accordance with the contractual interest rate up to 50%.
As a result, after borrowing the loan, after the defendant Hong Moumou paid 10 installments in full, the 11th installment only paid the interest and compound interest of more than 2,000 yuan during the period, and has repaid more than 47,300 yuan in total.
Therefore, the bank filed a lawsuit against Hong Moumou on July 14 this year, demanding the defendant to pay back the money.
The bank’s petition was to request the defendant to repay the principal amount including 162,661.65 yuan and interest (interest, penalty interest, and compound interest as of July 5, 2020, 83519.85 yuan; in addition, the loan principal was 162,661.65 yuan as the base, starting from July 2020. From the 6th, the overdue interest will be calculated at a monthly interest rate of 2% until the date of actual performance).
In accordance with the “Regulations on Several Issues Concerning the Application of Laws in the Trial of Private Lending Cases” issued by the Supreme People’s Court in August 2015, Article 26 established the “two lines and three districts” rule, that is, if the annual interest rate of private lending does not exceed 24%, Under the protection of the law, the people’s court will also support the lender’s litigation request.
However, a background worth noting is that on August 20 this year, a new judicial interpretation of private lending was introduced. 4 times LPR replaced the previous “two lines and three areas” and became the new upper limit of judicial protection for private lending rates. There is no conclusive conclusion on whether this interpretation applies to licensed financial institutions such as banks.
Returning to this case, the judgment shows that the court rejected the bank’s first-instance appeal and held that the plaintiff claimed to calculate the interest and principal penalty for the period from May 5, 2018 to July 5, 2020 at the agreed monthly interest rate of 2%. , Compound interest, the sum of which has exceeded the protection limit of four times the quoted interest rate of the one-year loan market, the court may adjust the calculation to four times the quoted interest rate of the one-year loan market when the plaintiff sued.
In other words, for the bank’s petition, the court found that the annualized interest rate of 24% was too high and supported the calculation of interest at 4 times LPR.
After the verdict was published, it caused widespread concern. Because before this, the industry generally believed that all licensed financial institutions did not apply the upper limit of judicial protection of private lending interest rates in name. And this judgment has sharply increased the uncertainty of this issue.
After that, Ping An Bank Wenzhou Branch appealed the case.
The second instance of the court found:
Financial institution loan contract disputes do not apply to the new judicial interpretation
Support the bank’s claim that interest is calculated at an annualized rate of 24%
The case ushered in a revised sentence in the second instance.
The second-instance judgment of the Wenzhou Intermediate People’s Court held that the case was a financial borrowing dispute. According to the provisions of Article 1, paragraph 2 of the New Civil Lending Judicial Interpretation, financial institutions and their branches established with the approval of the financial regulatory authority to engage in loan business were due to issue This judicial interpretation does not apply to disputes arising from financial services such as loans.
The court of second instance pointed out that the first-instance judgment adjusted the interest, compound interest and overdue interest agreed in the financial loan contract in this case to four times the quoted interest rate of the one-year loan market with reference to the provisions of the above-mentioned judicial interpretation. This is an error in applicable law and should be corrected.
At the same time, the court of second instance also held that when the case was accepted in the first instance, the judicial interpretation of the new private lending had not been implemented, and the judicial interpretation was not applicable to this case according to law.
The court found that for the second-instance appeal of Ping An Bank Wenzhou Branch, according to the contract, the monthly interest rate of the loan involved in the case was 1.53%, that is, the annualized interest rate was 18.36%; after the loan expires, if the loan is overdue, the monthly interest rate as agreed in the contract will be increased by 50% The standard calculation and collection of penalty interest, the overdue interest rate reached an annualized 27.54%.
In other words, for this case, the court’s opinion of the second instance was that the new judicial interpretation was not applicable to financial disputes such as loan contracts of financial institutions, and the new judicial interpretation had not been implemented when the case was accepted.
The final judgment of the Wenzhou Intermediate People’s Court showed that in this case, both the first-instance prosecution and the second-instance appeal of Ping An Bank Wenzhou Branch advocated a monthly interest rate of 2%, or 24% per annum. The appeal of the Wenzhou branch of Ping An Bank was established. Support according to law.
New judicial interpretation of private lending attracts attention
On August 20, the Supreme Law officially issued the newly revised “Regulations of the Supreme People’s Court on Several Issues Concerning the Application of Laws in the Trial of Private Loan Cases” (hereinafter referred to as the “New “Regulations”).
The new “Regulations” clarified the new upper limit for judicial protection of private lending interest rates. The National Interbank Funding Center authorized by the People’s Bank of China to issue four times the one-year loan market quote rate (LPR) as the standard to determine the upper limit of judicial protection of private lending rates, replacing the original “Regulations” “24 % And 36% as the benchmark, the two-tier and three-zone” regulations have greatly reduced the upper limit of judicial protection for private lending rates, and promoted private lending rates to gradually adapt to the actual level of my country’s economic and social development.
Calculated at 4 times the 3.85% quoted rate of the one-year loan market released on July 20, 2020, the upper limit of judicial protection for private lending rates is 15.4%.
After the introduction of the new regulations, the market is concerned about whether the sharp reduction of the maximum protection interest rate for private lending will affect credit cards and some non-bank-licensed financial institutions, such as factoring, financial leasing and other industries.
According to the new regulations, “private lending is concluded between other civil entities other than financial institutions engaged in loan business”; therefore, the general understanding is that all licensed financial institutions are not applicable in name, and other loans are The main business but the non-financial institutions need to be applied, and the private loans supported by the people’s courts need to be applied.
There have been multiple cases showing
4 times LPR is temporarily not applicable to financial institutions
According to the previous report of The Paper, after the introduction of the new regulations on August 20 this year, many judgments still use an annual interest rate of 24% as the upper limit of financial institutions’ financing expenses.
For example, on September 16, according to the judgment of the People’s Court of Luyang District, Hefei City, Anhui Province (2020) Wan 0103 Minchu 9413, the borrower should repay the principal of Huarong Consumer Finance’s loan of RMB 116,206.42 within ten days from the effective date of the judgment. The interest is 13095.66 yuan and the penalty interest is 3,177.56 yuan (the interest and the penalty interest are temporarily calculated until June 16, 2020, after which the total outstanding principal is used as the base, and the annual interest rate is 24% combined to the date of payment).
On September 25, according to the civil judgment of the People’s Court of Luohu District, Shenzhen, Guangdong Province (2020) Yue 0303 Minchu No. 10577, the defendant should repay the plaintiff’s principal of 195,235.24 yuan owed by Shenzhen Branch of China Guangfa Bank within ten days from the effective date of this judgment. , Interest is 4033.56 yuan, penalty interest is 4130.56 yuan, compound interest is 166.30 yuan (tentatively calculated until March 12, 2020, after that, it will be calculated to the date of payment in accordance with the contract and the People’s Bank of China, but the total interest and compound interest shall not exceed one year Interest rate 24%).
On September 27, according to the Civil Judgment of the People’s Court of Inner Mongolia Horqin Youyi Zhongqi (2020) Nei 2222 Min Chu No. 2795, the defendant paid the plaintiff Inner Mongolia Zhonghe Rural Credit Co., Ltd. to the plaintiff within 15 days from the effective date of this judgment. The company’s Horqin Right-wing Zhongqi business department borrowed 6484 yuan and interest (from April 11, 2018, calculated at a monthly interest rate of 2% until the day when the debt is fully repaid).
On September 28, according to the Civil Judgment of the People’s Court of Binzhou City, Shaanxi Province (2020) Shaan 0482 Min Chu Zi No. 1325, the defendant repaid the plaintiff’s loan principal of RMB 600,000 from the Binzhou City Small and Medium-sized Enterprise Financing Guarantee Company within ten days after this judgment became effective Yuan and its interest (the interest is calculated at a monthly interest rate of 2% from December 4, 2018 to the date of repayment).