Translated material
Swan, crayfish and pike
Bankers, officials and deputies argue about consumer loans
A round table was held in the State Duma, at which deputies, representatives of the Ministry of Economic Development and Trade, the Ministry of Finance, the Central Bank and large Russian banks discussed bills on consumer credit and bankruptcy of individuals. According to the director of the financial policy department of the Ministry of Finance, Alexei Savatyugin, the government plans to consider the first bill in March.Those gathered resembled the characters in Krylov’s famous fable: they proposed completely different ways to solve the problem and did not want to accept the arguments of their opponents. Deputies and bankers criticized the projects presented by officials, believing that after their adoption, credit institutions would be unprotected from unscrupulous borrowers.
Speaking in defense of the bill on consumer credit, Mr. Savatyugin said that “loan defaults are growing at a faster rate than the volume of consumer lending.” According to him, banks do not always honestly disclose information about the loan, and the private client is an unqualified borrower, having neither economic nor legal experience. The measures taken by the Central Bank and the antimonopoly service cannot always protect the client of a credit institution, since their instructions are often advisory in nature. Therefore, it is necessary to resolve this issue legislatively, the official emphasized.
In particular, the bill will establish a rule on the consumer’s right to receive information about the terms of the loan. In addition, there is a provision according to which the borrower, having received a loan, can refuse it within 14 days without giving reasons. In addition, according to the official, the bill gives the borrower the right to early repayment of the loan without sanctions from the lender.
The penultimate provision caused sharp criticism from bankers and deputies. “If people refuse to pay, who will compensate us for the losses? After all, we have to pay our employees, pay for borrowed funds,” notes Andrei Lykov, Chairman of the Board of Home Credit and Finance Bank
In his opinion, it is necessary, first of all, to protect lenders from potential unscrupulous borrowers. “People refuse to pay not because their situation is difficult, but because we can’t do anything with them,” the banker said. “The average loan size that we issue to our clients is 10 thousand rubles.” According to him, the courts of many Russian regions already hate bankers because they bombard them with endless claims for 2-3 thousand rubles. “They think we are crazy,” Mr. Lykov complained. “But these are the realities of life.”
In the Czech Republic and Slovakia, for example, he continued, incorrectly specified data in a credit application form threatens the borrower with a criminal case. “Many people think that we are receiving some fabulous windfalls, but you will not see this on our balance sheets,” the banker assured.
First Vice-President of the Association of Regional Banks "Russia" Alexander Khandruev is also dissatisfied with the bill. “The balance of interests is broken in the bill,” said Mr. Khandruev, explaining that the borrower and the creditor bank are equal figures. -- The bill does not say a word about the moral and material responsibility of the borrower for repaying the loan he took out. Only the borrower is protected and the interests of banks are not taken into account.”
However, Alexey Savatyugin suggested that Mr. Khandruev familiarize himself with the document “not from the 19th page, but at least starting from the 15th page.” “The responsibilities of the borrower are described in detail there,” noted a representative of the Ministry of Finance.
The proposal of the Deputy Director of the Department of Banking Regulation and Supervision of the Central Bank, Vladimir Chistyukhin, caused no less criticism. He said that it is necessary to limit the size of all “related payments” on the loan that are not related to the repayment of the loan principal and interest. In his opinion, banks have a number of commissions that are not included in payments on the loan itself, but indirectly increase the real interest rate on it. “I think it would be advisable to introduce a percentage limit on such related payments, for example, to fix a certain percentage of the loan amount,” said a representative of the Central Bank, adding that the restrictions could be 3-5% of the loan amount.
The head of the retail department of Raiffeisenbank, Roman Vorobyov, is not entirely clear what is meant by the phrase “related payments”, which is used by the representative of the Central Bank. “If we are talking about a fine or interest for an overdue debt, it is impossible to take into account in advance whether a person will be subject to this fine or not,” argues Mr. Vorobiev. “If we are talking about a bona fide borrower, then the associated payments should mean only one fee for maintaining a loan account.”
According to the banker, prices should be regulated by the market, and it would be wrong if the state sets them artificially. In this case, regulators should pay attention to both mobile operators and Internet providers, and not just credit institutions, notes Mr. Vorobiev.
An equally negative opinion was expressed about the second bill - on the introduction of bankruptcy proceedings in relation to a debtor citizen. According to the proposal of the Ministry of Economic Development and Trade, a citizen is considered unable to satisfy the claims of creditors if he does not fulfill financial obligations within six months from the day on which they must be fulfilled, or if the amount of his obligations exceeds the value of his property, which, in accordance with the law, can be applied to collection.
According to the general director of the Sequoia collection agency, Elena Dokuchaeva, such a law will entail both positive and negative consequences. She recalled that a similar law in the United States provoked a banking crisis and led to the ruin of small and medium-sized banks. The reason was that many debtors began to declare themselves bankrupt. In particular, the imperfection of the law is that it prohibits the debtor from declaring a second bankruptcy procedure, but does not prescribe the procedure for creating an information base on bankrupts. In addition, the draft states that bankruptcy is declared if the amount of debt exceeds the value of the property to be collected. As a result, an equally time-consuming problem arises - to evaluate the borrower’s property, Ms. Dokuchaeva noted.