On August 6, 2015, the provisions of the Supreme People's Court on Several Issues concerning the application of law in the trial of private lending cases were issued. The trainee lawyers of Shandong Borui law firm consciously organized to study the latest judicial interpretation of private lending. After a period of study, discussion and exchange, it plays a great role in the trainee lawyers' quick understanding of the judicial interpretation.

The introduction of the latest judicial interpretation of the private lending may cause the P2P platform that has attracted much attention to bear the guarantee liability, and the limit of four times the interest rate will be cancelled; In addition, there are some highlights in this judicial interpretation, which are as follows:

1、 Key legal provisions

[abolishing the limit of four times the maximum interest rate] Article 26 If the interest rate agreed between the borrower and the borrower does not exceed 24% of the annual interest rate, and the lender requests the borrower to pay interest at the agreed interest rate, the people's court shall support it. The interest rate agreed between the borrower and the borrower exceeds the annual interest rate by 36%, and the interest agreement on the excess part is invalid. If the borrower requests the lender to return the interest paid that exceeds 36% of the annual interest rate, the people's court shall support it.

[valid inter enterprise loans that meet the conditions] Article 11 for private loan contracts concluded between legal persons, other organizations and between them for production and business needs, except for the circumstances specified in Article 52 of the contract law and Article 14 of these Provisions, if the parties claim that the private loan contracts are valid, the people's court shall support them.

[P2P platform may assume guarantee liability] Article 22 the borrower and the lender form a loan relationship through the online loan platform. The provider of the online loan platform only provides media services. If the party requests it to assume the guarantee liability, the people's court will not support it. The people's court shall support the lender's request to the provider of the online loan platform to assume the guarantee liability if the provider of the online loan platform expressly or has other evidence to prove that it provides guarantee for the loan through web pages, advertisements or other media.

2、 Highlights of judicial interpretation

（1） On the definition of private lending.

The first paragraph of Article 1 of the interpretation has a clear meaning at the beginning: "the private lending referred to in these Provisions refers to the financing between natural persons, legal persons and other organizations and between them." This definition reflects the unique nature and scope of private lending. From the form of appellation, it makes clear the difference with the national financial regulatory agencies, and also distinguishes with the financial institutions from the scope of application of the lending subject.

（2） Acceptance and jurisdiction of private lending cases.

This part of the judicial interpretation mainly stipulates the prosecution conditions of private lending cases; The determination of the place where the private loan contract is performed and the litigation status of the guarantor provide a legal basis for the judicial acceptance and jurisdiction of private loan disputes under the background of the case registration system.

（3） Provisions on the overlapping of civil and criminal cases involved in private lending cases.

The civil criminal cross cutting issue mainly includes two aspects: the coordination of civil criminal procedure and the determination of entity responsibility. This part mainly includes:

1. the people's court shall not accept or reject the case of private lending suspected of illegal fund-raising, and transfer the clues and materials suspected of illegal fund-raising to the public security or procuratorial organs. This provision is conducive to better coordination and cooperation among the three organs of the public security, procuratorial and judicial organs in combating and dealing with the crime of stakeholder type illegal fund-raising.

2. the people's court shall transfer the criminal clue materials to the investigation organ for the crimes related to the private lending cases but not the same fact, but the private lending cases shall continue to be tried;

3. if the borrower is suspected of illegal fund-raising or is found guilty by an effective judgment, and the lender sues the guarantor to bear civil liability, the people's court shall accept it.

（4） On the validity of private loan contracts.

In view of the particularity of private loan contracts, the judicial interpretation mainly stipulates the following contents in this part:

1. the effective elements of private loan contracts between natural persons;

2. private loan contracts signed between enterprises for the purpose of production and operation shall be recognized as effective as long as they do not violate the provisions of Article 52 of the contract law and Article 14 of this judicial interpretation, which is also one of the most important provisions of this judicial interpretation;

3. the private loan contract signed by the enterprise to raise funds from employees in the form of loans within the unit due to the needs of production and operation is valid;

4. if the lending behavior of the borrower or lender is suspected of committing a crime, or if the effective judgment determines that it constitutes a crime, the private lending contract is not of course invalid, but the validity of the private lending contract shall be determined according to Article 52 of the contract law and Article 14 of this judicial interpretation.

（5） Responsibilities of the Internet lending platform.

According to the provisions, the borrower and the lender form a loan relationship through the P2P online loan platform, and the provider of the online loan platform only provides media services, so it will not bear the guarantee liability. If the provider of the P2P online loan platform expresses or has other evidence to prove that it provides guarantee for the loan through web pages, advertisements or other media, according to the request of the lender, The people's court may decide that the provider of P2P online loan platform shall bear the guarantee liability.

（6） On the identification of the mixed situation of private loan contracts and sales contracts.

This judicial interpretation clearly stipulates that the parties sign a sales contract as a guarantee for the private loan contract. If the borrower fails to repay the loan when it expires and the lender requests to perform the sales contract, the people's court shall try the case in accordance with the legal relationship of private lending. After the judgment made according to the legal relationship of private lending becomes effective, if the borrower fails to perform the monetary debt determined by the effective judgment, the lender may apply for auction of the subject matter of the sales contract to repay the debt.

（7） On the effectiveness of inter enterprise lending.

This judicial interpretation stipulates that enterprises borrow money from each other for the purpose of production and operation, which shall be protected by the judiciary.

Normal inter enterprise lending is usually done occasionally to solve financial difficulties or production needs, but it cannot be regarded as a normal and regular business. As a production and operation-oriented enterprise, if it takes regular lending as its main business, or takes it as its main source of income, it may cause the nature of the enterprise to change into a financial institution engaged in special lending business without the approval of the financial regulatory authority. Production and operation enterprises engaged in regular lending business will inevitably seriously disrupt the financial order and cause financial supervision disorder. This kind of behavior has damaged the social public interest objectively, so we must make a negative evaluation from the effectiveness. For this reason, the provisions specifically stipulate other circumstances under which inter enterprise loans shall be deemed invalid.

（8） Provisions on the invalidity of private loan contracts.

The provisions specifically enumerate the situations where private loan contracts should be deemed invalid, including:

1. obtaining credit funds from financial institutions and lending them to the borrower at high interest, and the borrower knows or should know in advance;

2. the funds obtained by borrowing from other enterprises or raising funds from the employees of the unit are re loaned to the borrower for profit, and the borrower knows or should know in advance;

3. the lender knows or should know in advance that the borrower's loan is used for illegal and criminal activities and still provides the loan;

4. violating social public order and good customs;

5. other violations of mandatory provisions on the effectiveness of laws and administrative regulations.

（9） On the handling of false civil actions.

If a false lawsuit is found after trial, the people's court shall, in addition to rejecting the plaintiff's request, impose a fine and detention on the participants in the lawsuit who maliciously create or participate in the false lawsuit in strict accordance with the provisions; If a crime is constituted, it must be transferred to a judicial organ with jurisdiction to investigate criminal responsibility.

（10） On the interest rate and interest of private lending.

The provisions on private lending interest rates and interests mainly include:

1. if there is no interest agreement between the borrower and the borrower, or the interest agreement between natural persons is not clear, the lender has no right to claim the borrower to pay the interest during the borrowing period;

2. the interest rate agreed by both parties does not exceed the annual interest rate of 24%, and the lender has the right to request the borrower to pay interest at the agreed interest rate. However, if the interest rate agreed by both parties exceeds the annual interest rate of 36%, the interest on the part exceeding the annual interest rate of 36% shall be deemed invalid, and the borrower has the right to request the lender to return the interest on the part exceeding the annual interest rate of 36%;

3. if interest is deducted from the principal in advance, the people's court shall recognize it as the principal according to the actual amount lent;

4. unless otherwise agreed by both parties, the borrower may repay the loan in advance and calculate the interest according to the actual loan period. In addition, this part also stipulates the overdue interest rate, voluntary interest payment and compound interest.