ECONOMY FINANCE&BANKING POLITICS

Government challenges with CCR law on Swiss franc loans conversion

The Government challenged with the Constitutional Court of Romania (CCR) on Monday evening the draft law adopted by Parliament referring to the conversion of Swiss Franc loans at the exchange rate of the date the loan was granted, Government Spokesman Liviu Iolu confirmed for Agerpres.

According to some official sources, the Government supports the social elements and cases, but the law in the form adopted by Parliament exceeds the support which the Victoria Palace can assume.

“The Government has supported the support measures of a social character, but the form adopted goes beyond this criterion,” the sources explained.

The law on the conversion of CHF-denominated loans into RON-denominated loans was adopted by Lower Chamber MPs last Tuesday, with 248 votes in favour, none against and no abstentions, after both the threshold of CHF 250,000 and the indebtedness level of 50 percent were eliminated.

According to the amendments filed by the commission, the conversion would be carried out through addenda to the loan contracts, at the exchange rate registered on the date the contracts were signed, the MPs eliminating the mention “through court order.”

The MPs however disagreed with the stipulation that the law’s implementation period should fall below 60 days, included in the initial text of the bill.

The Lower Chamber adopted the bill on the conversion of CHF-denominated loans on October 18, with 248 votes in favour.

According to the bill, CHF-denominated loans are to be converted into RON-denominated loans, at the exchange rate registered on the date the contract was signed. The conversion is to be carried out through addenda. The costs of the loan converted into RON will be negotiated with the consumer, in observance of the principle of good faith and professional diligence, so that the payment obligations should not be more burdensome for the consumer.

At the consumers’ requests, the banks that resort to the conversion of CHF-denominated loans can revert to the CHF contract and will carry out the conversion in the conditions of the current law, and the sums that the loaner would have collected from the loanee from the time the conversion was carried out to the moment the new addendum was signed are to be calculated in line with the loan contract.

 

Ciolos explains why conversion law was challenged: We don’t want those who have problems to pay because of speculators

 

Premier Dacian Ciolos stated on Tuesday that the Government decided to challenge the loan conversion law at the CCR not because it disagrees with it but because certain constitutional vulnerabilities of the law should be clarified before the law generates its effects, so that it is enforceable.

“We sent this law to the CCR not because we are against it, but because we consider that there are some elements there, in the form it was voted in Parliament, because unfortunately Parliament did not take into account the amendments we proposed, which, in our view, would have made it enforceable, and unless we clarify its constitutionality now, before it comes into force, there is the risk it would generate effects and a few months later someone else would attack it, a bank or anyone else. (…) Then it would create more problems to those who are waiting for their problems to be solved,” the Premier explained.

The Head of Government also stated that it should be seen whether the law, in the form approved by Parliament, is to the benefit of people with real problems or to that of speculators, adding that the Government will correct the legislative act right after the Constitutional Court issues its ruling.

“So we want to see whether there are elements of unconstitutionality, to clarify them now and I promise you that to the extent the CCR issues a rapid ruling the Government will take all measures to correct those things in the law so that it would be addressed to people who really have problems, not to speculators. (…) Out of the tens of thousands of people who contracted CHF-denominated loans, there are 200 who contracted loans in excess of CHF 250,000 and their loans total over 1 billion Lei out of some 5 billion Lei that were borrowed. So, we don’t want those who really have problems to pay for some speculators who speculated the CHF exchange rate. This was the reason why we sent the law to the CCR and to the extent that the CCR issues a rapid ruling we will come up with the measures needed to correct these things, for this law to be enforceable without there being the risk of subsequent challenges at the CCR after it generates effects,” Dacian Ciolos added.

 

PSD’s Dragnea: Yet another blow technocrat Gov’t applies to the middle class, Ciolos Gov’t once again shows it is against Romanians

 

Social Democratic Party (PSD) President Liviu Dragnea reacted harshly to the Government’s announcement that it challenged at the CCR the law on the conversion of loans.

The PSD President considers that the action against a law unanimously voted by the Romanian Parliament clearly shows that the Government led by Dacian Ciolos is against the Romanians.

“Another blow the technocrat Government applies to the middle class. Yet again, the Ciolos Government shows that it is against Romanians. Most of the contracts were signed with the face against the wall, without those contracting the loan being able to negotiate anything. And the banks were saying that they had correct assessments of the exchange rate’s evolution, assessments that turned out to be erroneous and that ended up destroying people’s lives,” the PSD President stated for STIRIPESURSE.RO.

He claims that the party he leads will continue to state that the law is necessary and will fight for it to come into force:

“In 2014, PSD tabled the conversion bill and backed it all the way to the final vote and will continue to back it because it is a necessary law for this great injustice to be fixed,” Liviu Dragnea concluded.

 

PNL’s Gorghiu: It would have been healthy for the Gov’t to state the reasons before it challenged the law

 

PNL President Alina Gorghiu stated on Monday evening that it would have been “healthy” for the Government to very clearly explain the reasons for this move before it challenged the conversion law at the Constitutional Court.

Against the backdrop in which Liberal MPs are among the signatories of this law, and their party backed the bill, the PNL leader pointed out that she found out from the press about the Government’s decision, the topic not being tackled during her meeting with the Premier on Monday morning.

“Maybe it would have been healthy for the reasons for this notification to be very clearly communicated before filing it,” she emphasised.

The PNL leader added however that this challenge may ease the law’s subsequent path, considering that the banks would have challenged it anyway.

 

CCR to discuss on November 23 the Government’s notification about law on conversion of CHF-denominated loans

 

The Constitutional Court of Romania (CCR) will discuss on November 23 the Government’s notification about the law that supplements government emergency ordinance no.50/2010 concerning loan contracts for consumers.

 

 

 

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