CHAIRMAN of the House Commerce Committee DISY MP Zacharias Zachariou on Tuesday said the last details of the bill have been ironed out and it will go to a plenum vote on March 17.
The bill abolishes a number of charges banks impose on borrowers, including a fee to look over the loan application, a fee to monitor the loan transaction history, an insurance fee, added interest rates and other hidden fees. The bill also requires the banks to calculate interest rates at 365 days or 366 days in a leap year and not at 360 days, which is the current practice.
The bill also stipulates that the bank is no longer allowed to unilaterally demand of the borrower to pay off the entire loan, barring special circumstances.
The bill was drafted by main opposition party AKEL and DIKO. AKEL MP Yiannakis Gavriel called on the government to “stop catering to the banks and start listening to the people”.
Gavriel asked all borrowers who believe that they have fallen victim to unfair bank charges to present their case to the Office of the Financial Ombudsman so they can have an additional defence on their side in case they decide to take the case to court.
DIKO MP Angelos Votsis said that the bill aims to protect borrowers from unfair bank charges.
Zachariou clarified that the bill doesn’t extend to loans in foreign currency and that it will not be retroactive. He was referring to the case of borrowers who converted their loans to Swiss francs in exchange for lower interest rates. Following the financial crisis the exchange rate changed leaving many of the borrowers with huge debts.
Greens MP Yiorgos Perdikis said that he didn’t believe that the bill will pass, claiming that it “smells of referral”.
The article says that it will not extend to loans of foreign currency and it will not be retroactive and clarify that Swiss loans are meant.
The question is if one takes a loan in Euro from the bank now, before the law is in force will the rules apply and when the law is expected to come in force?
(Editor’s comment: There is no guarantee that the bill will be passed into law with or without changes. The bill will be debated and voted at a plenary session of parliament tomorrow (17th). Assuming MPs vote it into legislation it will not be enacted until it is published in the Cyprus Gazette.
As the bill (assuming it’s passed) is not retrospective it will not apply to loans granted before it’s enacted.)
I read the title of this article and opened it with some excitement. It’s typical that the Cypriot Parliament saw fit not to include Foreign Loan customers in this legal wrangling.
The ministers see fit to avoid the Swiss Francs crisis to protect the banks, leaving us to the mercy of the banks, or stepping things up by using legal means to try and resolve.