Credit transactions are part of every day life in Switzerland.
On the other hand, the Swiss Government is trying to protect the consumer in the allocation of loans by means of laws and regulations (such as the Consumer Credit Act). Consumers' over-indebtedness is to be avoided by means of increased transparency requirements for lending.
Loan services, factoring, loan broking and finetrading generally are subject to the Swiss Money Laundering Act (AMLA) and pertinent ordinances. AMLA is based on a broad concept of credit facilities, i.e. loans in all forms, irrespective of the purpose, the form of the credit guarantee or the type of refinancing (equity or debt). The provider of such services acting on a professional basis qualifies under the AMLA as financial intermediary (see Circular Letter FINMA 2011/1, note 29 et seq.).
The provider of such services as financial intermediary has to become a member of a self-regulatory organization (SRO) (under supervision of FINMA) or to file a license petition with FINMA.
Furthermore, the Consumer Credit Act is also applicable. The consumer credit agreement is a contract by which a lender promises or grants a credit in the form of a payment deferral, a loan or similar financing aid to a consumer. The granting of such loans requires an authorization from the pertinent Canton. The authorization is granted if the applicant:
- can demonstrate an irreproachable business activity and lives in well-ordered financial circumstances;
- has the general commercial and professional knowledge and skills required to carry out the activity;
- has sufficient professional liability insurance.
As of the end of 2014, the central bank for credit information recorded a total of 399'224 outstanding consumer credit agreements with a volume of CHF 7.3 billion (ZEK annual report, 2015). The number of new contracts for consumer credit has been declining for several years. While 161'781 consumer loan contracts were still concluded in 2010, only 139'770 new contracts were concluded in 2014.
According to the Federal Statistical Office, 14.1 per cent of the population lives in a household with at least one outstanding consumer credit (Federal Statistical Office, 2009).
Jürg E. Hartmann