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July 27, 2021

Banking sector requests Parliament extension of deadline for debating draft law on capping interest rates

The Romanian Banking Association (ARB) and the Romanian Bank Employers Council (CPBR) request Parliament to ensure a real and constructive dialogue in debating the draft laws regarding the capping of interest rates, the limitation of the recoverable amount of the debt assignment and the removal of the credit contracts’ enforceable title character, a press release of the organisations informs.

The representatives of the banking sector request the 60-day extension of the deadlines initially proposed for the in-depth debate of the impact of the draft laws regarding the capping of interest rates and the limitation of the debt assignment’s recoverable amount. The banking community is seriously concerned with the mostly negative consequences both on consumers and the economy, that would be triggered by the entry into force of the three legislative proposals at various debate stages both in the Senate (the removal of the credit contracts’ enforceable title character), as well as in the Chamber of Deputies (the capping of interest rates, the limitation of the recoverable amount of the transferred debt),” reads the releases.

According to the document, the possible impact of these legislative proposals is also reported by the impact study carried out on Monday by KPMG Advisory, upon the request of ARB and CPBR. The KPMG study reveals that both the individual impact and the one of the three legislative proposals cumulated could lead to slow-down of the economic growth, a drop in consumption and investment and a decrease of the state budget revenues, beside other effects that will directly and immediately affect consumers.

The release specifies that the legislative proposals have many implications both for consumers and the macro-economic level, following the individual and aggregated impact. The main consequences comprised in the impact study consist in: the tightening of the credit conditions/the lending reduction with a direct impact on the fall of consumption (dwelling acquisition, durable and consumer goods purchase), and the population’s net wealth; the credit drop for housing acquisition which might increase pressure on the real estate market; the deepening of the social classes gap; the consumers’ payment behaviour mutation; limiting the access of the population to credit, with a diffusion potential at the level of the entire economy – with limited benefits in consumer protection, the limitation of the credit institutions’ capacity to use the debt assignment in view of managing the level of under-performing credits, cumulated with the emergence of litigations meant to obtain the enforceable title that will lead to an additional breach of the judicial system.

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