Recently, the Shaanxi Provincial Local Financial Management Bureau issued three consecutive administrative penalty decisions, imposing administrative penalties on three financing guarantee institutions: Shaanxi Hangzhuo Financing Guarantee Co., Ltd. (hereinafter referred to as "Hangzhuo Rongdan"), Shaanxi Jieyi Financing Guarantee Co., Ltd. (hereinafter referred to as "Jieyi Rongdan"), and Shaanxi Huide Financing Guarantee Co., Ltd. (hereinafter referred to as "Huide Rongdan").

Hangzhuorong was fined 190000 yuan for "failing to report business operations to regulatory authorities as required"; Both Jieyi Rongdan and Huide Rongdan were fined 250000 yuan and 350000 yuan respectively for providing false annual audit reports to the supervisory and management departments.

It is worth mentioning that Jieyi Rongdan and Hangzhuo Rongdan are regulars in the loan assistance industry.

According to business information, Jieyi Rongdan was established in February 2009 with a registered capital of 1 billion yuan. Its sole shareholder is Shaanxi Hangtou Xindu Industrial Development Co., Ltd. After penetration, the controlling shareholder is Xi'an Aerospace Investment Co., Ltd. Xi'an Aerospace Investment Co., Ltd. was applied by Zhongji Zhiping Leasing (Tianjin) Co., Ltd. this year to become a restricted high consumption enterprise, and was subject to information enforcement with an amount exceeding 100 million yuan.

According to business information, Hangzhuo Rongdan was established in August 2010 with a registered capital of 1.003 billion yuan. Its shareholders include Shaanxi Yihe Shangdao Industrial Co., Ltd. and Shaanxi Linyao Import and Export Co., Ltd., holding 70% and 30% of the shares respectively. The common controlling shareholder of both companies is Huaxia Guoxin Holdings (Beijing) Co., Ltd. After penetration, the actual controller is the Education and Training Center of China Future Research Association.

Among them, Jieyi Rongdan appears on the list of credit enhancement services for loan cooperation in dozens of banks and consumer funds. Hangzhuo Rongdan has also appeared in multiple banks and consumer funds.

Blue Whale News found that in the list of historical cooperation, Sanxiang Bank, Ningyin Consumer Finance, Hubei Consumer Finance, and China Post Consumer Finance have cooperated with these two financial institutions simultaneously.

In the updated list of loan assistance cooperation by Sanxiang Bank at the end of May this year, two financing companies were included.

In the list of loan assistance cooperation released by Hubei Consumer Finance last month, Jieyi Rongdan is no longer included, but Hangzhuo Rongdan is still listed.

China Post Consumer Finance just added Jieyi Rongdan as a lending partner at the end of last year; Ningyin Consumer Finance significantly reduced its cooperation with Rongdan Company in the updated list of loan assistance cooperation last month, and Jieyi Rongdan and Hangzhuo Rongdan are no longer included.

Industry insiders told Blue Whale News that such financing guarantee institutions are no longer just auxiliary roles in providing "credit enhancement" in the lending ecosystem, but have gradually evolved into core participants in avoiding interest rate red lines and even assisting gray industries in "channel operations".

Financing guarantee institutions were originally intended to mitigate financial risks, but in the lending assistance business, they have been transformed into "fee tools". Under the strict requirements of regulatory authorities on the comprehensive financing cost of loans, loan assistance platforms have introduced licensed financing institutions to charge additional user fees in order to maximize profits. On the contract book, the interest portion is strictly controlled within the red line of 24%, and by charging additional "guarantee fees" or "consulting service fees" to the borrower, the actual financing cost is often raised to 36% or even higher.

Under the continuous strict supervision of the loan assistance industry, the chaos of introducing guarantees to increase creditworthiness, which ostensibly controls risks but actually aims to charge additional fees, will accelerate its clearance.

(Author Blue Whale Finance)