Opinions on Several Issues Regarding the Handling of Criminal Cases of Illegal Lending

In order to punish illegal lending activities in accordance with the law, earnestly safeguard the order of the national financial market and social harmony and stability, effectively prevent illegal lending from causing crimes involving illegal activities and other illegal and criminal activities, and protect the legitimate rights and interests of citizens, legal persons and other organizations, according to the provisions of the criminal law, the criminal procedure law, relevant judicial interpretations and normative documents, the following opinions are hereby put forward on several issues concerning handling criminal cases of illegal lending:

I. Where state provisions are violated by habitually lending to unspecified members of the public without the approval of the regulatory departments, or beyond the scope of operations, and for the purpose of profit, disturbing the order of the financial marketplace, and the circumstances are serious; conviction and punishment is to be for the crime of illegal business operations in accordance with Criminal Law article 225(4).

"Regularly lending to unspecified members of the public" as provided for in the preceding paragraph refers to lending money, regardless of whether called a loan, 10 times or more to multiple unspecified persons (including units and individuals) within 2 years.

Where the period for repayment of a loan is extended after the loan expires, it is calculated as a single instance of lending.

II. in any one of the following circumstances, carrying out illegal lending as provided for in Article 1 of these Opinions with actual annual interest rates exceeding 36% is 'serious circumstances' as provided for in Criminal Law article 225, except that where a single instance of lending did not exceed the 36% actual annual interest rate, it must not be included when convicting and sentencing:

(1) an individual's illegal lending amounts to a total of 2,000,000 yuan or more, or a unit's illegal lending amounts to a total of 10,000,000 yuan or more;

(2) an individual's unlawful gains amount to a total of 800,000 yuan or more, or a unit's unlawful gains amount to a total of 4,000,000 yuan or more;

(3) an individual illegally lent to a total of 50 or more persons, a unit illegally lent to a total of 150 or more persons;

(4) caused serious consequences such as suicide, death, or psychological aberration for the lender or their close relatives;

In any of the following circumstances, it is 'especially serious circumstances' as provided for in Criminal Law article 225:

(1) an individual's illegal lending amounts to a total of 10,000,000 yuan or more, or a unit's illegal lending amounts to a total of 50,000,000 yuan or more;

(2) an individual's unlawful gains amount to a total of 4,000,000 yuan or more, or a unit's unlawful gains amount to a total of 20,000,000 yuan or more;

(3) an individual illegally lent to a total of 250 or more persons, a unit illegally lent to a total of 750 or more persons;

(4) caused especially serious consequences such as suicide, death, or psychological aberration for several lenders or their close relatives;

III. in any one of the following circumstances where the amounts of illegal lending or unlawful gains, and the number of those lent to, are also close to the standard amounts and numbers provided in article 2 of these provisions for 'serious circumstances", and "especially serious circumstances", it may be considered 'serious circumstances' or 'especially serious circumstances':

(1) They have received 2 or more instances of administrative punishment for illegal lending within the last two years;

(2) They have carried out illegal lending 10 or more times with actual annual interest rates exceeding 72%.

"Nearing" as using in the provisions of the preceding paragraph shall usually be understood as 80% or more of the relevant amount or numerical standard.

IV. Article 1 of these Opinions must not be applied to convict or punish those who only lend to designated subjects such as family and friends or persons within a unit. However, in any of the following circumstances, it shall be convicted and punished together with illegal lending to unspecified subjects:

(1) Loans were given to unspecified targets through family and friends or persons within a unit;

(2) Including people within a unit for the purpose of giving them loans, and then giving loans;

(3) Conducting publicity aimed at the general public, or concurrently making loans to unspecified targets and to family and friends and persons within a unit.

V. The amount of illegal lending shall be determined on the basis of the principle actually lent or given out to the borrower. Where interest is collected by the illegal lender under names such as introduction fees, consultation fees, management fees, late fees, or compensation for a breach, or through methods such as withholdings from the principal, the relevant amounts are to be included when calculated the actual annual interest.

All assets actually collected by perpetrators of illegal lending beyond these sums are to included as unlawful gains.

Where acts of illegal lending have not been punished, the number of times and amounts of illegal lending, amount of unlawful gains, numbers of recipients of illegal loans, and so forth, shall be calculated cumulatively.

VI. Where in order to engage in illegal lending activities, financial institutions are set up without authorization，financial institution funds are taken to make high-interest loans, loans are acquired by fraud, or the public's savings are illegally taken in, and a crime is constituted, punishment shall be given in accordance with the more serious crime.

Where acts such as intentional homicide, intentional infliction of harm, unlawful confinement, intentional destruction of property, or provocation are carried out in order to forcibly collect debts created through illegal lending, the sentences for multiple crimes shall be concurrent.

Where others are assembled, instigated, or hired to use tactics such as creating disturbances, harassing, or assembling a mob to forcibly collect debts, and this does not constitute a crime by itself, but the illegal lending has already constituted the crime of illegal business operations, a heavier sentence shall be given in accordance with provisions on the crime of illegal business operations.

The circumstances provided for above do not apply where the Criminal Law and judicial interpretations have other provisions.

VII. Where there is organization of illegal lending, and at the same time there are other illegal or criminal activities, and the standards for designation as crimes by underworld criminal organizations, malign forces, or malign force crime gangs, they shall be investigated, prosecuted, and tried separately as underworld criminal organizations, malign forces, and malign force crime gangs.

Where malign forces make illegal loans, the lending amounts, amounts of unlawful gains, and numbers of lendees for finding 'serious circumstances' or 'especially serious circumstances', may be set at 50% of those provided in article 2 of these Measures; and where there are also circumstances provided for in paragraph 1 of article 3 of these Measures, designations may be made in accordance with 40% of the provided standards.

VIII. These Opinions are to take effect on October 21, 2019. Handle acts of illegal lending that occurred before these Measures took effect in accordance with the Supreme People's Court's "Notice on Several Issues Related to the Correct Understanding and Application of "State Provisions" in Criminal Law" (Fafa (2011) No 155).