Licensed consumer finance companies frequently fined; compliance remains the main theme of regulation

Reporter: Li Bing

On March 23, the Shanghai Regulatory Bureau of the National Financial Regulatory Administration released information on an administrative penalty. Shanghai Shangcheng Consumer Finance Co., Ltd. (hereinafter referred to as “Shangcheng Consumer Finance”) was fined.

Specifically, Shangcheng Consumer Finance was fined 1.6 million yuan for seriously violating prudent operating rules in personal loan management, actually performing duties without obtaining approval for appointment qualifications, seriously violating prudent operating rules in audit management, seriously being imprudent in the management of deposits, and seriously violating prudent operating rules in the management of debt collection outsourcing. In addition, Qiu Xiajuan, the senior general manager of the direct business division at Shangcheng Consumer Finance, and Sun Qian, the senior general manager of the risk management department of Shangcheng Consumer Finance, were each given a warning. According to the materials, Shangcheng Consumer Finance was approved to筹建 on November 17, 2016.

From the overall situation in the industry, multiple licensed consumer finance companies have been fined within the year. For example, China CITIC Consumer Finance Co., Ltd. was issued a “dual-penalty” order for violations such as processing objections beyond the time limit, failing to provide written responses to objections as required, failing to label objection information as required, and failing to report personal credit information accurately, among other violations; the company was fined 1.05 million yuan. Suyin Consumer Finance was fined 484k yuan for violating the relevant rules on the collection, provision, querying, and related management of credit information.

Liu Bin, director of the Financial Research Office at the China (Shanghai) Pilot Free Trade Zone Research Institute, told Securities Daily reporter that in 2026, the supervision of the licensed consumer finance industry will show four characteristics: First, penalties will become normalized; the “dual-penalty” system will become a common pattern. Second, the coverage of entities committing violations will be broad. Third, regulatory priorities will focus on core risk areas such as credit reporting compliance, control of cooperating institutions, debt collection practices, and post-loan management. Fourth, regulatory intensity will increase, with implementation of “penetration-style” supervision.

The strict regulatory posture in the consumer finance sector in 2026 continues the industry supervision trend in 2025. Looking back at regulatory penalties in recent years, the reasons for violations by licensed consumer finance companies have been relatively concentrated. Multiple consumer finance companies have received penalty orders for issues such as “imprudent personal loan management,” “imprudent management of cooperating institutions,” and “inadequate control over cooperative business.” For example, in May 2025, Beijing Yangguang Consumer Finance Co., Ltd. was fined 1.4 million yuan due to defects in its cooperation model, insufficient control over cooperative business, failure to independently calculate credit grant amounts and loan pricing, inadequate effectiveness of post-loan management, and insufficient management of cooperating institutions, among other reasons. In December 2025, Zhaolian Consumer Finance Co., Ltd. was fined 500k yuan for imprudent management of cooperating institutions and inadequate management of the use of post-loan funds.

“Judging from the penalty notices of consumer finance companies in recent years, the regulatory focus is deepening from ‘behavioral compliance’ to ‘system compliance,’ shifting from punishing violations to forcing institutions to build full-process risk control systems,” Tian Lihui, a professor of finance at Nankai University, said. At present, penalty notices for licensed consumer finance companies show three major characteristics: First, the “dual-penalty” system has become the norm, with simultaneous accountability for both the institution and the individuals responsible. Second, the amounts of penalties are rising; multi-million-yuan fines frequently occur, sending a signal of “strict supervision.” Third, violations are highly concentrated; credit reporting, post-loan management, and cooperation management are key areas of regulatory attention.

Lou Feipeng, a researcher at China Postal Savings Bank, said that for consumer finance companies, while grasping opportunities for industry development, they must also truly assume the main responsibility for compliant operations and continuously improve their comprehensive risk management capabilities. Judging from the issues reflected in regulatory penalty notices in recent years, industry institutions still need to address shortcomings in areas such as corporate governance, compliant operations, and risk prevention and control, further strengthen the management of cooperating institutions, and improve the full-process risk control system covering pre-loan investigation and post-loan management.

Regarding compliance and institution-building, Tian Lihui suggested that institutions need to make three shifts: from “passive response” to “active embedding,” integrating compliance into the entire business process; from “local rectification” to “systemic reconfiguration,” building a full-chain risk control system; and from “human-driven” to “technology-enabled,” using big data and AI to achieve intelligent risk management and control. Institutions need to recognize that compliance is not a cost, but a core competitiveness. With consumer rights protection increasingly becoming a core dimension of regulatory evaluation, only institutions that are able to first build a compliant system that is full-process, penetration-style, and deeply integrated with business can truly achieve sustainable development.

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责任编辑：Qin Yi