The Money Lenders Ordinance

The provisions of the Money Lenders Ordinance summarized below are important for the protection of all the parties to a loan agreement, and should be read carefully. The summary is not part of the law, and reference should be made to the provisions of the Ordinance itself in case of doubt.

 

Summary of Part III of the Ordinance—Money lenders transactions

Section 18 sets out the requirements relating to loans made by a money lender. Every agreement for a loan must be put into writing and signed by the borrower within 7 days of making the agreement and before the money is lent. A copy of the signed note of the agreement must be given to the borrower, with a copy of this summary, at the time of signing. The signed note must contain full details of the loan, including the terms of repayment, the form of security and the rate of interest. An agreement which does not comply with the requirements will be unenforceable, except where a court is satisfied that it would be unjust not to enforce it.

Section 19 provides that a money lender must, if requested in writing and on payment of the prescribed fee for expenses, give the original and a copy of a written statement of a borrower’s current position under a loan agreement, including how much has been paid, how much is due or will be due, and the rate of interest. The borrower must endorse on the copy of the statement words to the effect that he has received the original of the written statement and return the copy as so endorsed to the money lender. The money lender must retain the copy of the statement so returned during the continuance of the agreement to which that statement relates. If the money lender does not do so he commits an offence. The money lender must also, upon a request in writing, supply a copy of any document relating to the loan or security. But a request cannot be made more than once per month. Interest is not payable for so long as the money lender, without good reason, fails to comply with any request mentioned in this paragraph.

Section 20 provides that the surety, unless he is also the borrower, must within 7 days of making the agreement be given a copy of the signed note of the agreement, a copy of the security instrument (if any) and a statement with details of the total amount payable. The money lender must also give the surety, upon request in writing at any time (but not more than once per month) a signed statement showing details of the total sum paid and remaining to be paid. The security is not enforceable for so long as the money lender, without good reason, fails to comply.

Section 21 provides that a borrower may at any time, on giving written notice, repay a loan together with interest to the date of repayment, and no higher rate of interest may be charged for early repayment.

This provision, however, will not apply where the money lender is recognized, or is a member of an association recognized, by the Financial Secretary by notice in the Gazette in force under section 33A(4) of the Ordinance.

Section 22 states that a loan agreement is illegal if it provides for the payment of compound interest, or provides that a loan may not be repaid by instalments. A loan agreement is also illegal if it charges a higher rate of interest on amounts due but not paid, although it may provide for charging simple interest on that part of the principal and interest outstanding at a rate not exceeding the rate payable apart from any default. The illegal agreement may, however, be declared legal in whole or in part by a court if the court is satisfied that it would be unjust if the agreement were illegal because it did not comply with this section.

Section 23 declares that a loan agreement with a money lender and any security given for the loan will not be enforceable if the money lender was unlicensed at the time of making the agreement or taking the security. The loan agreement or security may, however, be declared enforceable in whole or in part by a court if the court is satisfied that it would be unjust if the agreement or security were unenforceable by virtue of this section.

 

Summary of Part IV of the Ordinance—Excessive interest rates

Section 24 fixes the maximum effective rate of interest on any loan (the “effective rate” is to be calculated in accordance with the Second Schedule to the Ordinance). A loan agreement providing for a higher effective rate will be unenforceable and the lender will be liable to prosecution. This maximum rate may be changed by the Legislative Council but not so as to affect existing agreements. The section does not apply to any loan made to a company which has a paid up share capital of not less than $1,000,000 or, in respect of any such loan, to any person who makes that loan. 

(L.N. 139 of 2022)

Section 25 provides that where court proceedings are taken to enforce a loan agreement or security for a loan or where a borrower or surety himself applies to a court for relief, the court may look at the terms of the agreement to see whether the terms are grossly unfair or exorbitant (an effective rate of interest exceeding the rate specified in the section may be presumed, on that ground alone, to be exorbitant), and, taking into account all the circumstances, it may alter the terms of the agreement in such a manner as to be fair to all parties. The section does not apply to any loan made to a company which has a paid up share capital of not less than $1,000,000 or, in respect of any such loan, to any person who makes that loan. 

(L.N. 139 of 2022)(L.N. 522 of 1995)

 

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放债人条例

以下所列的《放债人条例》条文撮要，对保障订立贷款协议的各方均至为重要，应小心阅读。该撮要并非法例的一部分，如有疑问，应参阅《放债人条例》有关条文。

 

《放债人条例》第III部撮要——放债人进行的交易

本条例第18条列出关于放债人作出贷款的规定。每份贷款协议须以书面订立，并由借款人于该协议作出后的7天内及于该笔款项贷出之前签署。在签订协议时，须将已签署的一份协议摘记，连同本撮要一份给予借款人。该摘记须载有该宗贷款的详尽细则，包括还款条款、保证形式及利率。不符合上述规定的协议不得予以强制执行，除非法庭信纳不强制执行该协议并不公平。

 

本条例第19条订定，如借款人提出书面要求及就有关开支而支付订明费用，则放债人须将该借款人在贷款协议下当时的债务情况(包括已还款项、到期或即将到期的款项及利率)的结算书正本及副本一份给予借款人。借款人须在该结算书的副本上签注文字，表示已经收到该结算书的正本，并将经如此签注的该结算书副本交回该放债人。放债人则须在与该结算书有关的协议持续期间保留该份已交回的结算书副本。如放债人不照办，即属犯罪。如借款人提出书面要求，放债人亦须供给与该宗贷款有关或与保证有关的任何文件的副本。但上述要求，不得在一个月内提出超过一次。放债人如无充分理由而没有遵照本段所述的要求办理，则不得收取在该等要求没有照办期间的利息。

 

本条例第20条订定，除非保证人亦是借款人，否则须在协议作出后的7天内，给予保证人一份已签署的协议摘记、一份保证文书(如有的话)及详列须支付款项总额的结算书。如保证人在任何时间提出书面要求(不得在一个月内超过一次)，放债人须给予他一份已签署并详列已支付款项总额及尚欠款项总额的结算书。放债人如无充分理由而没有遵照办理，则不得在该项要求没有照办期内强制执行该项保证。

本条例第21条订定，借款人以书面通知后，可随时将贷款及计算至还款日期为止的利息偿还，放债人不得因借款人提早还款而征收较高利率。

 

放债人如是财政司根据《放债人条例》第33A(4)条以宪报公告认可的放债人或认可的社团的成员，则上述条文不适用。

 

本条例第22条述明，任何贷款协议如订定须支付复利或订定不准以分期方式偿还贷款，均属非法。此外，任何贷款协议如订定到期而未支付的款项须收取较高利率，亦属非法，但该协议可订定，未偿还的本金部分及利息须收取单利，但利率不得超过在没有拖欠的情况下须支付的利率；但如法庭信纳，该协议如因不符合本条规定而成为非法并不公平，则可宣布该份非法协议全部或部分合法。

本条例第23条述明，如放债人在订立贷款协议时或接受贷款保证时并未领有牌照，则与该放债人订立的贷款协议及给予他的保证不得强制执行；但如法庭信纳，该协议或保证如因本条规定而不能强制执行并不公平，则可宣布该协议或保证的全部或部分可予强制执行。

 

《放债人条例》第IV部撮要——过高利率

本条例第24条厘定任何贷款的最高实际利率(“实际利率”须按照本条例附表2计算)。任何贷款协议如订定更高的实际利率，则不得强制执行，而放债人亦可被检控。此最高利率可由立法会予以变更，但已存在的协议则不受影响。对于向缴足款股本不少于$1,000,000的公司作出的贷款或作出如此贷款的人，本条并不适用。 

(1999年第23号第3条；2022年第139号法律公告)

本条例第25条订定，在强制执行贷款协议或强制执行贷款保证的法庭法律程序中，或在借款人本人或保证人本人向法庭申请济助时，法庭可查察该协议的条款，以视该等条款是否极之不公平或利率过高(实际利率如超逾本条指明的利率，即可单凭该理由而推定该利率过高)，而法庭在顾及所有情况后，可将该协议的条款更改，使其对协议各方均公平。对于向缴足款股本不少于$1,000,000的公司作出的贷款或作出如此贷款的人，本条并不适用。 

(1999年第23号第3条；2022年第139号法律公告)

 

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