According to an initiative application from the Ministry of Justice, private customers should be able to retroactively convert their loans into a fixed interest rate, reported the “Kurier” (online) and the “Standard” (online). However, the plan is not well received in the ÖVP-led finance ministry. Specifically, the retroactive conversion should apply to all variable loans that were taken out following March 21, 2016. According to the information, the banks would be obliged to offer conversion to all affected customers. The fixed interest rate to be applied should be set by the Financial Market Authority (FMA), the two newspapers write.
The background to the initiative is the interest rate turnaround initiated by the European Central Bank (ECB) last year. Due to the increase in the key interest rate, the interest rates on variable loans and thus also the repayment rates have increased, which has caused many borrowers to get into financial difficulties.
Reservations from the Ministry of Finance
According to the Greens’ plan, the initiative proposal should have been decided during the current plenary session (until December 15th), as the “Kurier” reports. But there are reservations from the Ministry of Finance. “The proposal was submitted at short notice and at first glance raises, among other things, constitutional questions,” the newspaper quoted from a statement from the ministry.
According to “Standard”, the Ministry of Finance wants to examine the idea. However, the proposal is “half-baked”. The effects on financial market stability and banks have not been examined. In addition, subsequent intervention in contracts is tricky.
