Richard Ďurana z INESS komentoval pre Slovak
Spectator novelu zákona, ktorý vláde dáva právomoc určovať úrokový strop pri
úveroch. Zákon výrazne obmedzuje možnosť dostať sa k úveru pre chudobnejšie
vrstvy obyvateľstva. Regulácia úroku podľa neho povedie k neregulovanej úžere.
Bank group fears law designed to protect clients will have
opposite effect
SLOVAKS now have a weapon to fight what cabinet calls legalised loan
sharking. Parliament has passed a package of laws that will bring more
transparency to the Slovak loan market, regulate voluntary auctions and protect
citizens from losing their property due to harmful loan conditions, the Justice
Ministry said.
Parliament passed the legislation on October 25 and President Ivan
Gašparovič has already signed the bill into law.
However, critics say the laws might also limit some citizens from getting
loans and cause the illegal loan market to grow.
The term legal usury has been used to describe the activities of companies
that offer fast cash, usually within 24 hours, but ask clients to use their
real estate as collateral. The client pays astronomical interest rates that are
several times higher than the amount of the loan.
If the client is late paying a single installment, his property moves to a
voluntary auction even before the company suggests an alternative installment
calendar.
"For example, someone borrowed Sk250,000 (€7,500) and was expected to
return Sk450,000," said Peter Straka, a judge who is currently on an
internship at the Justice Ministry’s civil and commercial law section.
"However, when they signed the contract, they had to sign a transfer of
ownership rights to the company for an apartment worth Sk3 million.
"There have been several cases where a company started to execute its
right to the collateral even before the original term for paying off the loan
expired, and then they sold these rights without limits."
After that, the company is not interested in getting the installments – it
actually becomes the owner of the apartment, Straka added.
The new loan legislation, which is part of the law on voluntary auctions,
puts a ceiling on how much banks, financial companies or credit companies can
charge for a consumer loan.
It also obliges financial companies to tell clients the total cost of the
loan, including interest and all the fees involved in the transaction, and the
average market price.
The ceiling will be proposed by the Finance Ministry and then approved by
the cabinet as a regulation.
The mandatory information form will be included in the contract that
consumers sign to take out the loan. It will help them detect loans that are
financially risky, Justice Ministry spokesman Michal Jurči wrote on the
ministry’s official website.
"Citizens must be able to properly evaluate the loans they take out
from companies that do not have banking licenses," said Justice Minister Štefan
Harabin in an official release. "Even a seemingly attractive offer might
end up as a family tragedy."
Victims of bad loans should be able to use all the available means of
protection, according to Harabin.
"We have to fight legal usury," he said.
The Justice Ministry advises citizens to borrow money from institutions that
are under strict supervision by the National Bank of Slovakia (NBS).
Loan limit questioned
The Finance Ministry has been critical of the law’s wording from the very
beginning. It submitted a different version of the draft legislation to
parliament, said ministry spokesman Miroslav Šmál.
The ministry preferred educating clients about loans instead of putting a
limit on a wide range of loan products.
It proposed that certain companies would have to provide their clients
truthful information about their products, and that the contract would include
all the necessary facts, Šmál told The Slovak Spectator.
"It is very complicated to set the maximum cost of a loan when it comes
to consumer loans. It is not very reasonable," he said. "It has to
apply to different credit, installment and leasing companies, for example. The
structure of the loan products that these companies provide is different, so it
is hard to set a single limit."
The Slovak Banking Association, which favoured the Finance Ministry’s proposal
when the law was being prepared, has also been critical of the loan ceiling.
The association’s executive director, Ladislav Unčovský, said the new law talks
about "maximum repayment" but does not define what that is.
The maximum loan amount eventually made it into the law through an MP’s
proposal during parliamentary debate.
According to talks between Finance and Justice Ministries that followed
parliament’s decision, the maximum total amount that clients repay for the
loan, including interest, will be based on the annual percentage rates of
consumer loan products. The annual percentage rate is a banking term that
includes interest rates and other loan fees.
The maximum repayment amount would be a multiple of the average annual
percentage rate for several categories of loan products.
The Finance Ministry will collect the percentage figures from loan
providers, who will have to tell the ministry and the NBS the annual percentage
rates of their loans starting next year.
The exact maximum repayment figures are expected to be published during the
second quarter of 2008, Straka said.
Richard Ďurana, director of the
Institute of Economic and Social Studies, said that the measure will not
fulfill the ministry’s goal of limiting loan sharking, but paradoxically, it
will stimulate the practice.
"Based on the government’s
rhetoric, we can expect that it will set the maximum price of the loan – de
facto, the interest rate – lower than some of the groups operating on the
market have," Ďurana told The Slovak Spectator. "That will limit
low-income groups‘ access to loans, and they will try to solve their situation
by seeking products that are available on the illegal market."
Surveys conducted in 2004 by the Policies Institute for the British
Department for Business, Enterprise and Regulatory Reform say that imposing a
limit makes it impossible for some citizens to acquire loans and creates room
for an illegal loan market, the banking association’s Unčovský said.
"The association wants to make sure that setting the limit does not
hurt bank clients, and that some groups of clients will not have their access
to the market hindered," he told The Slovak Spectator.
"Any form of ceiling distorts the market because it inherently
represents a form of price regulation. From our point of view, it is
ineffective on a competitive market."
Ďurana said there is no reason for
the state to intervene in a voluntary contract between the client and the
provider of loan.
A paternalistic approach by the state
lowers the responsibility of clients, "who then are more likely to trust
everybody without analysing any deeper."
But Straka said the measure will not harm the market and he does not expect
a massive outflow of loan firms.
The legislation brings more transparency to voluntary auctions and makes
sure that loan companies cannot take ownership of the property clients use as
collateral before the loan actually matures, he said.
By Beata Balogová
and Marta Ďurianová
Spectator staff
The Slovak Spectator, 11/26/2007
