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IMF: Consumer Credit Law Could Cost Romania Banks Hundreds Of Millions

Romanian lenders are likely to lose hundreds of millions in euros unless the current version of the consumer credit law is amended so it doesn’t affect older loans, an official of the International Monetary Fund said Thursday.
IMF: Consumer Credit Law Could Cost Romania Banks Hundreds Of Millions
Florin Badescu
28 oct. 2010, 17:08, English

Jeffrey Franks, head of the IMF mission to Bucharest, said the European directive, which was transposed into Romanian legislation via a government ordinance drafted by the country’s consumer protection authority ANPC, aimed at new loans and shouldn’t be applied retroactively.

Franks said the final form of the act should hopefully minimize bank costs and protect customers at the same time.

The IMF and Romanian central bank have requested local lenders to send data on potential losses following the introduction of the consumer loan law in its current form, people familiar with the matter told MEDIAFAX Wednesday.

They said 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.

According to Viorel Stefan, head of the finance committee of Romania’s lower house, the IMF might delay the disbursement of a new aid tranche of its EUR13 billion loan until the consumer loan law is amended to exclude ongoing contracts.

„The loan tranche Romania should receive by December 15 might be granted under the condition that this issue is resolved,” Stefan said after a meeting with Franks Thursday.