The bill was submitted to Parliament of the Ministry of National Economy and Finance with title “Loans: Transparency, competition, protection of the vulnerable – Incorporation of Directive (EU) 2021/2167, reintroduction of the “HERAKLES” program and other urgent provisions”.
The purpose of the bill is: a) the integration of Directive (EU) 2021/2167 of the European Parliament and of the Council of 24 November 2021 on credit managers and credit buyers and the amendment of directives 2008/48/EC and 2014/17/ OJ (L 438), b) the orderly functioning of the capital market and its enhanced control, c) the general protection of debtors, and d) the completion of the process of providing a guarantee to securitizations that had been submitted during the second phase of the “HERAKLES” program » and the consideration of new requests submitted by non-systemic banks as well.
With the draft law they are promoted changes in the operating framework of management companies (servicers) mainly in terms of their relations with borrowers by tightening the supervisory framework, improvements in the extrajudicial mechanism in order to become a more attractive and dominant tool for debt settlement with special provisions for vulnerable debtors and larger “haircuts” of mortgage loans, while opening the way for the granting of loans – even mortgages – from non-banking institutions (credit companies). The draft law also provides for the possibility of financing by servicers for debt restructuring.
The bill will be submitted for processing to the competent parliamentary committee next Monday, December 27 (4:00 p.m.).
The changes in Extrajudicial
- The proposal to restructure the debt of the vulnerable will be automatically and compulsorily accepted by all creditors. The debtor reserves the right to reject the proposal and creditors can challenge it on specific grounds in the courts (Magistrate Courts) within 20 days. Reasons for the opposition are exclusively: ) the inaccuracy of the data submitted by the debtor and b) the reduced satisfaction of the creditor’s claim in relation to the satisfaction that would result from the completion of the enforcement procedure.
- For all debtors who resort to extrajudicial proceedings and have secured loans, the algorithm from which the amount of the write-off is derived is improved and leads to a reduction of up to 28% of the regulated debt from secured loans. This will provide for a ministerial decision to be issued after the passage of the bill.
- By ministerial decision, the interest rate of the arrangements will be set at 3% for 3 years.
The obligations of the servicers
Claims management companies undertake specific obligations regarding information, service and respect for consumer rights in accordance with the provisions of European Directive 2021/2167 which is incorporated into national law. In addition to the provisions of the Directive, the servicers are required by March 31, 2024 to have put into operation the personalized information system that will operate through a digital platform to which the debtor will enter with codes (by analogy with the banks’ web banking. Through the platform, the borrower will be able to be informed in detail about the amounts he owes (principal, interest, interest rate, etc.) but also the periodicity of the installments and their amount, the current balance, etc. Until the operation of the digital platforms, the servicers are required to provide this information in writing (amount of debt, installments, interest rate, etc.) to each borrower upon his request within 30 days.
In case of non-compliance, penalties are foreseen, such as fines of up to 500,000 euros, an obligation to correct the violation and up to the revocation of the operating license.
Source: APE-MPE, Daily
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