The Future of Consumer Credit in Lithuania: <i>Quo vadis</i>, Consumer Credit?
Analysis of the facts of the current situation in Lithuania with respect to the consumer-credit market clearly reveals that the market is rapidly developing, and some statistical data are thought‑provoking here with respect to the question of whether the state should take any measures in this connection (via stricter regulatory measures or other actions).
The article addresses several aspects of the consumer-credit landscape: it i) provides a general overview of the regulation of consumer credit in Lithuania; ii) examines the particular fields of regulation of consumer credit, taking into account, where applicable, the provisions specific to control of easy-access non-secured consumer loans extended via electronic means; ii) and offers analysis of the proposed amendments to the regulations on consumer credit that are now under discussion at the ministerial level.
Analysis of existing consumer-credit regulation in Lithuania reveals that, on one hand, even now there are some norms regulating the consumer-credit market that could protect the interests of consumers and prevent excessively easy access to non-secured consumer loans via electronic means – if applied effectively. However, the proposals made in the draft for amendments to the Law on Consumer Credit reflect a quite clear tendency toward tighter and more extensive regulation of the consumer-credit market. It seems that this regulation is not being undertaken understandably as the last resort; instead, it is only one option for the resolving of issues related to the consumer-credit market, and proper justification of such regulations remains absent. Moreover, some of the proposals (even for consumers) are extremely drastic. The author of this article is quite convinced that the problems of the consumer-credit market cannot be remedied through purely legislative means anyway, especially as the practical application of most of the legal norms suggested has not been tested. Rather, the state should take coherent extensive and systemic measures that could help to increase consumers’ conscientiousness, financial awareness, and financial literacy, with particular attention paid to young people who do not have enough experience in the management of their finances. Only a conscientious, financially literate society can be a counterbalance to the unfair commercial practices employed by many financial service providers. It is clear that supply quickly follows wherever demand exists, and the same can be said with regard to unfair commercial practices. Accordingly, what is the future of consumer credit? Quo vadis, consumer credit?