Viewpoint... The identification standards of professional lenders and the rules of judicial application.

Published:

2022-07-13

With the rapid economic and social development and the abundance of private capital, the private lending market has become increasingly active. At the same time, private lending disputes related to "professional lending" are also increasing day by day, and the identification of "professional lending" is the focus of review in such cases. There are different understandings with difficulties in judicial practice. This article will combine the Supreme Law and the relevant cases of the local court, the "professional lender" identification standards and judicial ideas to sort out, hoping to be able to handle such cases to help. 1 The concept of a professional lender. Professional lenders refer to units that have not obtained the approval of the financial regulatory authorities and do not have the qualifications to issue loans, but lend funds to unspecified objects in society to earn high interest, and the lending behavior has the characteristics of business and regularity, as well as individuals who take lending as their important source of income and regularly lend to unspecified objects and earn high interest. Professional lending and private lending are to lend money to charge interest for the behavior content, professional lending is illegal, not the content of the behavior is illegal, but its behavior is illegal, that is, the actor in the absence of financial qualifications in the case of financial institutions business mode of normal lending to non-specific objects. 2 The relevant legal provisions of professional lenders. 1. Article 1 of the Opinions of the Supreme People's Court, the Supreme People's Procuratorate, the Ministry of Public Security, and the Ministry of Justice on Several Issues Concerning the Handling of Criminal Cases of Illegal Lending, in violation of national regulations, without the approval of the regulatory authority, or beyond the scope of business, for the purpose of making profits, Regularly granting loans to unspecified objects in the society and disrupting the order of the financial market, in accordance with the provisions of item (IV) of Article 225 of the Criminal Law, convicted and punished. In the provisions of the preceding paragraph, "regularly granting loans to unspecified objects in society" refers to lending funds to unspecified people (including units and individuals) more than 10 times in the name of borrowing or other names within 2 years. 2. Article 19 of the the People's Republic of China Banking Regulatory Law No entity or individual may establish a banking financial institution or engage in the business activities of a banking financial institution without the approval of the banking regulatory authority under the State Council. 3. Article 53 of the Minutes of the National Conference on Civil and Commercial Trials of Courts A legal person who has not obtained the qualification to lend in accordance with the law to engage in private lending, as well as an unincorporated organization or natural person who engages in private lending in the form of private lending, shall be deemed invalid in accordance with the law. If the same lender engages in paid private lending multiple times within a certain period of time, it shall generally be recognized as a professional lender. 4. Article 13 of the Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases shall be deemed invalid under any of the following circumstances: (1) taking loans from financial institutions for on-lending; (II) on-lending funds obtained by borrowing from other profit-making legal persons, raising funds from employees of the unit, or illegally absorbing deposits from the public; (III) lenders who have not obtained the qualification to lend in accordance with the law provide loans to unspecified objects in society for the purpose of profit; (IV) the lender knows or should know in advance that the borrower's loan is used for illegal and criminal activities and still provides loans; (V) violates the mandatory provisions of laws and administrative regulations; (VI) violates public order and good customs. 5. Zhejiang Higher People's Court, Zhejiang Provincial People's Procuratorate, Zhejiang Provincial Public Security Department, etc.<依法严厉打击与民间借贷相关的刑事犯罪强化民间借贷协同治理的会议纪要>Article 2 of the Notice is included in the "List of Professional Lenders", and the following conditions should generally be met: 1. Based on the number of cases closed for three consecutive years, the same or related plaintiffs are involved in more than 20 private lending cases in civil litigation in the same basic court (including pre-litigation mediation, the same for the following), or more than 30 private lending cases in civil litigation in the same intermediate court and the basic courts under the jurisdiction; 2. In the same year, the same or related plaintiff is involved in more than 10 private lending cases in the civil litigation of the same basic court, or more than 15 private lending cases in the civil litigation of the same intermediate court and the basic courts of the jurisdiction; 3. In the same year, the same or related plaintiffs are involved in more than 5 private lending cases in the same intermediate court and the basic courts under their jurisdiction with a cumulative amount of more than 1 million yuan, or more than 3 private lending cases with a cumulative amount of more than 10 million yuan; 4. If two or more of the following conditions are met and the number of cases reaches more than half of the provisions of items 1 and 2, it can also be identified as a professional lender:(1) the debit note is in a uniform format;(2) The defendant defends that the plaintiff is not the actual lender or the plaintiff requires the principal and interest to be paid to a third party;(3) The principal of the loan is claimed to be delivered in cash without other evidence;(4) The interest on the loan is withheld when the principal is delivered or the interest actually paid by the defendant is significantly higher than the agreed interest;(5) The plaintiff himself refuses to appear in court without justifiable reasons or makes a false statement of the facts of the case when he appears in court. 6. "Opinions of the Higher People's Court of Jiangsu Province on Establishing a List System of Suspected Professional Lenders (for Trial Implementation)" Article 2 When trying private lending cases, the first thing to do is to inquire about related cases. The same lender and its actual controlled related parties are the plaintiffs. If there are more than 5 private lending cases sued by the people's courts at all levels in the province within one year, the lender shall be included in the list of suspected professional lenders. Those who can be preliminarily identified as professional lenders through the trial of cases or other means shall not be subject to the above-mentioned restrictions on the number of cases. 7, "Tianjin Higher People's Court on the issuance.<天津法院民间借贷案件审理指南（试行）>Article 21 of the Notice of the Lender who has not obtained the qualification to lend in accordance with the law and has repeatedly engaged in paid private lending within a certain period of time may generally be deemed to constitute a professional lending act. Private lending contracts formed as a result of professional lending practices are invalid. Professional lending is business and for-profit. In the trial of private lending cases, it is possible to comprehensively determine whether the lender is commercial according to the number of times the lender lends within a certain period of time, the number of private lending cases brought by the same plaintiff or related plaintiffs, the degree of formatting of the loan contract, whether the lender publicly promotes, publicizes or expressly indicates the willingness to lend, the amount of borrowing and interest, and other factors. If the same plaintiff or related plaintiff files more than 5 private lending cases with the city's courts within two years, or if the lender lends funds to an unspecific person in society more than 3 times within two years, it can generally be determined that the lender's lending behavior is commercial. If the loan contract stipulates interest, service fees, consulting fees, management fees, liquidated damages and other related expenses, or if the borrower has actually paid the above-mentioned expenses, the lender shall be determined to lend the money for profit. Occasional lending by a lender whose primary or day-to-day business does not involve lending, or by a lender who does not lend for profit on the basis of a human relationship, does not constitute a professional lending practice. 8. The Intermediate People's Court of Rizhao City, Shandong Province "Implementation Opinions on Establishing a List System of Suspected Professional Lenders" The same plaintiff sued more than 5 private lending cases in this court within one year, or the same plaintiff sued private lending in different courts within one year. More than 10 cases, or more than 15 plaintiffs in different courts in the city in the past three years, will be included in the "List of Suspected Professional Lenders". 3 The Judicial Identification Standard of Professional Lenders (1) Determination of the number of private lending cases filed from the same plaintiff or associated plaintiff. The economic development of different regions is different, and the provisions on the number of cases involved by the lender are different, which should be determined in accordance with the relevant provisions of the region and in combination with the relevant jurisprudence of the region. [Case] (2021) Lu 14 Min Zhong No. 867 Zhang Wulin, Cui Shuangshuang and Other Private Loan Disputes In the opinion of the Court, Zhang Wulin advocated that Yin Yuanhao lend usury, arbitrage transfer, to lend as a business, the guarantee loan contract is invalid. After investigation, from August 2013 to January 2019, "Yin Yuanhao and his wife Liu Lanying" were 6 cases involving private loans for the plaintiff, with a total amount of 14 cases as high as 3.85 million yuan. In the second instance, Yin Yuanhao admitted that the 400000 yuan loan used in this case was a loan from Xia Xiangdong; and (2020) Lu 1424 Minchu No. 1475, this case and (2015) Linshang Chuzi No. 1327, 1328 cases 7 loans are standard contracts, agreed to interest, comprehensive rates, late fees, liquidated damages and other disguised high interest charges. Yin Yuanhao and his wife Liu Lanying have repeatedly engaged in paid private lending for a certain period of time, so Yin Yuanhao should be identified as a professional lender in accordance with the law, and the 400000 yuan loan contract between him and Zhang Wulin is invalid. [Case] (2021) Lu 14 Min Zhong 1291 Sun Baosheng and Shi Pingping Dispute over Right of Recourse The Court believes that from 2015 to 2021, Xiao Dezhi and Yuan Chunzhen, as plaintiffs, had a total of 10 private lending cases within the jurisdiction of Dezhou Intermediate People's Court, and the loan contracts in the 10 cases were all unified standard contracts. Xiao Dezhi and Yuan Chunzhen's behavior of lending money to unspecified people many times does not conform to the normal state of private lending between natural persons, and its characteristics of lending as a business are obvious. Comprehensive investigation of the litigation cases in the form of borrowing, interest rate agreement, etc., the Court determined that Xiao Dezhi, Yuan Chunzhen belongs to professional lenders, its loan contract signed with Sun Baosheng, Shi Pingping invalid. (2) From the lender's behavior. The formatting of the loan contract, the public publicity of the borrower's willingness to lend, the actual payment of interest greater than the agreed payment of interest, etc., may be recognized as a professional lender even if the amount and number of cases involved do not meet the relevant standards. [Case] (2020) Supreme Famin Shen No. 5797, Wei Feng and Li Jun Guarantee Contract Dispute Case The Court believes that, first of all, according to the facts ascertained 1. the second instance of this case, in addition to this case, it has been ascertained that Wei Feng had a total of 9 loan contract disputes involving litigation from 2013 to 2015, involving a loan amount of more than 0.1 billion yuan, indicating that Wei Feng had provided loans to others many times during this period, and the loan amount was huge, and his borrowing behavior was repetitive. The monthly interest rate agreed upon in each loan contract is relatively stable, and the liquidated damages after overdue are charged at 2 ‰ per day, indicating that the loan contract format signed by Wei Feng with others is stable and used repeatedly. In terms of the content of the interest and default payment stipulated in the loan contract, Wei Feng's interest on borrowing from others and the interest on the default payment have reached the upper limit of the legal protection of the private lending interest rate, and his behavior has a business nature. [Case] (2019) Yu 08 Min Zhong No. 2695 Li Shengli and Zhang Ying, Cao Mingjiang and Han Jinghui Dispute over Loan Guarantee Contract The court believes that since 2016, Li Shengli has filed 39 lawsuits in the court of first instance and the people's court of Shanyang district of Jiaozuo city over private loans, guarantee contracts and implementation objections, involving 121 person-times, and these personnel have no significant characteristics, which is sufficient to confirm the fact that Li Shengli is providing funds to unspecified groups of people in the society. In the whole process of lending funds, the loan contract, IOU, receipt and so on are highly stylized, and only need to fill in the main contents such as the name and amount of the borrower, which can also reflect Li Shengli's business characteristics of taking borrowing as his business... Judging from the above characteristics, Li Shengli should belong to a professional lender. (3) From the relationship between the lender and the borrower. Professional lenders lend to social non-specific objects, that is, the borrower and the lender do not have a relationship, kinship and other specific relationships. [Case] (2019) Supreme Famin Shen No. 1500 Wang Hua and Wang Guochen Private Lending Dispute The court held that Wang Guochen made reasonable explanations for the large number and large amount of bank transactions, such as 142 bank financial transfers, 191 cash withdrawals at the counter, 25 transfers between Wang Guochen and his spouse Qi Moumou, 18 mutual transfers of bank cards under Wang Guochen's own name, and 6 bank card purchases. Wang Hua argued that Wang Guochen had no evidence to prove that "as many as 71 people were involved in the transaction", and he failed to submit evidence of the identity of Wang Guochen as a "professional lender" by the relevant authorities. To sum up the above three points, for the Wang Guochen Bank has a large number of transactions and a large amount, the possibility of its legal capital transactions cannot be ruled out, nor can it be determined in this case that Wang Guochen's behavior is a "professional lender. [Case] (2020) Lu 14 Min Zhong No. 3287 Li Hu and Shandong Magi Food Co., Ltd. confirmed the dispute over the invalidity of the contract The Court held that Li Hu and Shandong Maggie Food Co., Ltd. argued that the original judgment was wrong in the application of the law, that Wei Haibing belonged to a professional lender, and that the private lending contract involved in the case should be invalid, for which the existing evidence was not sufficient to prove it. Professional lenders are those who do not have the approval of the financial regulatory authorities, do not have the qualifications to issue loans, and use lending as an important source of income for a certain period of time, and regularly lend to unspecified objects in order to earn high interest rates. Lending behavior is repetitive and recurring, and the purpose of borrowing is business. In this case, the loan relationship involved the person involved in the case has a family relationship and is not a socially unspecified object. The appellee also made a corresponding explanation of the financial transactions with others. The evidence given by the appellant does not prove that Wei Haibing has the above-mentioned characteristics in the professional lender's determination. The appellant also did not provide evidence of the identity of Wei Haibing's professional lender by the relevant authorities. During the trial of the second instance, the appellant did not have new facts and reasons, nor did he submit valid evidence to support his claim. The court did not support the appellant's appeal request. Conclusion After the lender is identified as a professional lender, the relevant loan contract is invalid, but the borrower shall still return the principal portion of the loan to the lender. For the lender, being identified as a professional lender is not only a loss of interest, but also may be investigated for criminal responsibility for the crime of illegal business operation according to the relevant provisions of the Supreme people's Court, the Supreme people's Procuratorate, the Ministry of Public Security and the Ministry of Justice. In addition, professional lenders are often prone to "routine loan" fraud, illegal fund-raising, usury, intentional injury, illegal detention, intentional destruction of property, provocation and other criminal acts, need to pay attention to the relevant risks.</天津法院民间借贷案件审理指南（试行）></依法严厉打击与民间借贷相关的刑事犯罪强化民间借贷协同治理的会议纪要>

Key words:

Occupation, Lending, Private, Lending, Borrowing, Case, Contract, Lending, Lender.