The Legal Rgulation Of High Interest Rate Private Lending

With the rapid growth of the social economy and the rapid development of the private economy,the funding needs of citizens,legal persons and other organizations are becoming more and more prosperous.In stark contrast to this,there is a serious shortage of funds available to SMEs and individuals,especially the current economic situation in China.In the period of transformation and upgrading,the problem of structural “financing difficulties” has become increasingly prominent,and private lending has gained enormous room for development.It has been widely accepted as a convenient and quick form of financing.From this perspective,private lending,as a useful complement to formal finance,has played a positive role in solving the contradiction between supply and demand for funds.In addition to this,high-interest private lending also has social support value and promotes the diversified development of the financial market,which has considerable positive significance.On the other hand,due to inadequate development of China’s financial industry,imperfect legislation,unreasonable regulations,and inadequate supervision,the development of private lending has been chaotic and disorderly,and risks have been continuously accumulating;at the same time,a series of social diseases accompanied by private lending have also been awaited.improve.Therefore,it is very important to use the law to regulate high-interest private lending.The key to the issue of high-interest private lending is the interest rate issue.Regulation of high-interest private lending,interest rate regulation is at the core.Therefore,the correct understanding of interest rates determines whether the regulation of high interest rate private lending can achieve good social effects.The essence of interest rates is the price of funds.The free floating of prices is a necessary condition for the market to realize the function of resource allocation.Controlling prices will not only lead to inefficiency or even market disruptions,but will even lead to more serious social problems.Therefore,interest rates should also be regulated in a more relaxed way to protect the interests of lenders and borrowers,and to meet thecommunity’s need for financial accommodation.Of course,the interest rate has its own particularity compared with the price of general merchandise,so the necessary control is still indispensable.The formulation of laws and rules must conform to basic economic laws.Other issues related to high interest rate private lending,including information asymmetry,unequal status of lenders and borrowers,easy to breed crimes,increase of potential financial risks,and promotion of unhealthy society,should also adopt a scientific and rigorous attitude,based on their causes and internalities.The mechanism is to carry out targeted regulations,and it is not possible to carry out strict controls simply by taking out problems,and even rashly use penalties to crack down on lending practices.Otherwise,it will repeat the cycle of “disassociate one from another,and die once”.Problems can not only not be fundamentally resolved,but may even worsen.The author believes that for the regulation of high-interest private lending,the preferred method is to include high-interest private lending into the scope of the civil law and allow lenders to use civil litigation to achieve creditor rights and safeguard their legitimate interests.In the specific implementation process,flexible and differentiated provisions can be made for different types of borrowing,and at the same time,the judge is given the necessary discretion to replace the one-size-fits-all interest rate control.In addition,special laws should be formulated to make more specific provisions on high-interest private lending.Finally,the establishment of a private interest registration system with high interest rates and the inclusion of high-interest private lending in the scope of supervision will not only help protect the legitimate rights and interests of creditors and debtors,but also prevent and control the occurrence of financial risks,and may also provide a basis for the formulation of national policies.