On Friday, FSA sent the proposal for a new consumer credit scheme to the Ministry of Finance for consideration.
Among other things, it is argued that the Danish financial regulator will not allow the banks to make exceptions to customers who do not meet all the requirements of the new regulations. The mortgage regulation that regulates bank lending to housing offers banks the possibility to deviate quarterly from the requirements in ten percent of the applications.
- Loan applicants are assessed on the basis of additional information on income and expenses, as well as debts and equity. The income and capital ratio must be compared with comparison data and the debt information must be checked against the debt register (available next summer, red.anm.).
- If the customer does not have sufficient resources to cover the normal cost of living after an interest rate rise of five percentage points on the total debt or if the total debt is more than five times the annual income, no loans are granted.
- The loan agreement contains requirements for installment payments and the longest term, and loans with a term of more than five years are not granted.
- These requirements do not apply to credit card applications with low credit limits, provided that the applicant does not have another credit card. Refinancing of existing loans is on a given basis, except for the requirements for operational capital and debt.
Finanstilsynet will therefore not give the same flexibility to the banks for consumer loans.
– Consumers of consumer protection in this area can argue that banks do not have room for discretion by means of a deviation quota, the audit writes in the proposal.
Consumer credit banks are in a bad mood that the control discourages them with all flexibility.
The main problem of disputes is the requirement of a maximum period of five years for the repayment of consumer loans. This is where many of the banks have stretched out for their customers, according to the survey.
"We do not agree with the decision of the Danish FSA to include some flexibility to assess the situation of individual customers, as is the case in the mortgage regulation, and there should be room for the bank and the customer to than to reach five years of agreement in cases where there is no risk of customers entering into debt obligations that they can not meet later, "says Oddbjørn Berentsen, CEO of Easybank.
- Unsecured debt, including credit cards.
- Compose about three percent of total household debt, but 14 percent of total interest tax.
- Consumer loans have lent about NOK 108 billion in Norway.
- Defaults and losses on consumer loans are higher than for other types of loans to private individuals.
Source: Finanstilsynet / Norges Bank
Communication manager Kai Morten Dice in Bank Norwegian agrees.
"We are concerned that the audit proposes not to refinance loans for a duration of more than five years, meaning that people who have to clean up their finances by refinancing expensive loans for a loan with lower interest rates and less costs do not. if they do not process the five-year repayments, I do not think it was the intention of the audit and I hope the Ministry of Finance is willing to change something, "he said.
Foreign banks must be accommodated
Consumer credit banks, on the other hand, are more satisfied that foreign banks must comply with the regulations.
Until now, foreign consumer banks that provided loans to Norwegians could distance themselves from the regulations. In the new regulation Finanstilsynet proposes to put an end to it.
"It is logical that all companies offering services in Norway are obliged to follow the same rules," says Baltzersen.
"We are very positive that there is a regulation that is equal to different banks, not least the unfair competitive situation between Norwegian and foreign banks," says Bent H. Gjendem, Managing Director of Monobank.
Fell on the stock market
Of the largest banks for consumer credits in Norway, both the Norwegian bank, Komplett Bank and the Monobank are listed on the stock exchange. The market immediately reacted negatively to the new regulatory proposal and immediately sent down several shares of the companies after it became known. Komplett Bank closed Friday's share trading with 1.24% and Bank Norwegian down 0.83%. The monobank took hold in the autumn of the morning and ended unchanged on the stock market.
However, the banks for consumer loans have so far experienced strong growth in both lending and the stock market this year, despite the fact that it has become known that the further tightening of the consumer credit market will continue.
In the past three months Bank Norwegian has risen by 25 percent, Komplett Bank by 17 percent, while Monobank has dropped by just over two percent.
On Wednesday, Per Braathen aircraft personnel also returned to the Oslo Stock Exchange with Brabank's consumer loan bank. It was a big rebound, with a stock market jump of 29 per cent at a price of 36 kroner during the week.
On the ownership side of Brabank, Braathen himself, investor and billionaire Erik Must and the family and real estate investor Olav Thon.(Conditions)