Core Viewpoint - The implementation of the new regulations on internet lending by commercial banks, effective from October 1, 2025, significantly restricts the profit margins of lending platforms and compels them to optimize risk control and pricing strategies [1][2]. Summary by Sections Regulatory Changes - The new regulations establish a "whitelist" system for financial institutions engaging in lending, with a cap on interest rates set below 24%, reducing the previous range of 24%-36% [1]. - The regulations have prompted financial institutions to accelerate the cleanup of their partnerships, with 31 licensed consumer finance companies disclosing their cooperative institutions by the deadline [1]. Collection Practices - Despite the new regulations, aggressive collection practices, including verbal abuse and threats, remain prevalent in the industry, leading to high levels of consumer complaints [4][8]. - A case study highlights a borrower receiving threatening messages that included personal information and intimidation tactics, indicating a continuation of violent collection methods [5][6]. Financial Impact - The new regulations have compressed the profit margins of lending products, forcing platforms to shift their focus towards risk management and optimizing customer structures [2][13]. - The industry is experiencing a decline in recovery rates, particularly for loans overdue by three months (M3), with current recovery rates estimated between 3% to 5% [9][12]. Industry Response - Lending platforms are increasingly focusing on negotiation and collaboration with overdue customers to find reasonable repayment solutions, moving away from aggressive collection tactics [14]. - The industry is witnessing a shift towards a more compliant and technology-driven approach to collections, emphasizing the need for a comprehensive risk management system [15]. Challenges and Recommendations - The presence of "black market" debt restructuring services complicates the collection landscape, as these services target distressed borrowers for high fees [14]. - Experts recommend that lending platforms enhance their compliance mechanisms and improve the selection process for collection agencies to ensure adherence to legal standards [15].

Group 1 - The core issue highlighted is the need for stronger consumer protection in the financial services sector, particularly regarding unreasonable pricing and hidden fees that inflate loan costs [1][2] - The report from the China Consumers Association indicates that issues such as "violent" debt collection practices are prevalent, causing distress to consumers [1][2] - Regulatory actions have been taken against financial institutions for non-compliance, with a notable case being Beijing Sunshine Consumer Finance fined 1.4 million yuan for improper loan pricing practices [2] Group 2 - The relationship and management between consumer finance companies and their partner institutions are critical, as many companies rely on third-party platforms for customer acquisition [3] - Recent regulations require financial institutions to implement a list management system for their partner institutions, with some companies beginning to disclose their partner lists [3] - The ongoing regulatory scrutiny in the consumer finance sector is expected to persist, emphasizing the importance of compliance for long-term survival in a competitive market [4]