Romania’s Chamber of Deputies adopts draft law on CHF loan conversion

Newsroom 18/10/2016 | 15:28

The Plenum of the Chamber of Deputies adopted on Tuesday the controversial draft law on CHF loan conversion, which eliminates the CHF 250,000 threshold. The bill was adopted with 248 votes in favor.

According to the draft law, loans in Swiss francs are converted into RON at the exchange rate valid the day the contract is signed, with the conversion being made by addendum. The costs of the credit converted in RON will be negotiated with the client, taking into account the principle of good faith and professional requirements, so that payment obligations cannot be more burdensome for the client, Ciprian Nica, vice-president of the Legal Committee of the Chamber of Deputies said. According to Nica, only in exceptional cases the parties can turn to courts. The Chamber of Deputies is the decision-making body for the project.

According to Nica, another amendment is that according to which “at the request of clients, banks that converted Swiss francs loans can go back to the CHF loan and make the conversion in the conditions provided by the law.”

Nica added that the committee took into account the fact that some clients negotiated with the banks the conversion of credits. “Another amendment adopted by the committee is that according to which there is only one eligibility criterion, namely that the provisions of the present law only benefit individuals who are in the position of consumer. Paragraph 2, the CHF 250,000threshold was eliminated,” Nica said.

According to liberal MP Virgil Guran, the National Liberal Party (PNL) will endorse the project. “This law is putting things right, meaning that banks must understand, these multinational companies that come here and believe we are only a market where they can make a profit, that in Romania there are institutions fighting for the rights of their citizens and that the Romanian Parliament understands when they must intervene. We must take care that people do not suffer or become slaves to the banks. The PNL will vote this law and will support at any time the interest of Romanians,” Guran said.

The project initiator, Social Democratic Party (PSD) Ana Birchall, said that MPs have the opportunity to end a social crisis started in Romania n 2015.

“Everyone who took loans in Swiss francs woke up to see their rates doubled or tripled overnight without it being their fault. When we introduced the project we had in mind to offer Romanians suffocated by debt the chance to start a new life together with their families. Everyone who, overnight, saw their rates double or triple only exclusively due to currency exchange fluctuations deserve this compensatory gesture from us,” Birchall said.

The reactions of Klaus Iohannis and Mugur Isarescu

President Klaus Iohannis said on Tuesday that he will ask for the opinion of the banking system regarding the draft bill. He has the option to sign the draft bill into law or the send it back to Parliament, if certain provisions need to be changed.

The governor of the National Bank of Romania (BNR), Mugur Isarescu, said that the main risk, such in the case of the debt discharge law, is the uncertainty of contracts between the parties.

„But for me it’s hard to imagine a functional economy in which the contractual discipline becomes irrelevant. Meaning that the contract doesn’t matter anymore,” said Isarescu.

The central bank head also talked about populist trends and the “magic solutions” that can make the beneficiaries happy on the short term, although they generate economic costs on the medium and long term.

Georgeta Gheorghe

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