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IMF Asks Romanian Banks To Assess Impact Of Consumer Loan Law – Sources

The International Monetary Fund and Romania’s central bank have requested local lenders to send data on potential losses following the introduction of a government approved ordinance on consumer loans, people familiar with the matter told MEDIAFAX Wednesday.
IMF Asks Romanian Banks To Assess Impact Of Consumer Loan Law - Sources
Elvira Gheorghiţă
27 oct. 2010, 15:26, English

The banks are required to calculate the impact of adjusting their loan fees to the new norms included in the ordinance, as well as the cost of replacing internal interests while keeping the fixed margins unchanged, the sources said.

Romania’s government approved in June an emergency ordinance regarding consumer loans, based on a document drafted by the consumer protection authority ANPC. The act transposes a European directive into the local legislation.

The ordinance eliminates early repayment fees for loans with variable interests and introduces a new calculation method for interests, based on a transparent reference index plus a fixed percentage, which cannot be modified throughout the duration of the contract.

ANPC extended the directive’s stipulations to also cover existing loans, forcing the banks to amend approximately eight million loan contracts.

On Tuesday, ANPC said the ordinance complies with EU norms in the field and applying it retroactively for existing loans will not damage the client/bank relationship.

Constantin Cerbulescu, head of ANPC, said he had a „productive” discussion with officials of the International Monetary Fund regarding the consumer credit law, but stressed ANPC will not modify its stance on the existing loans.

Cerbulescu’s statement was issued minutes after IMF officials said the institution was concerned about Romania’s decision to apply the measure retroactively, because the measure could lead to „negative effects” for the eastern European country.

End-September, the European Commission requested Romanian authorities send clarifications on the consumer loan ordinance, following a series of complaints about the EU directive being transposed retroactively.

According to Cerbulescu, ANPC and Romania’s Department for External Affairs will sent a reply to Brussels this week.