Romanian Chamber of Deputies passes consumer loan decree while EC starts infringement procedures

Romania’s Chamber of Deputies has adopted the government emergency decree on consumer loans with 134 to 71 votes and 12 abstentions, after the Chamber's budget and finance committee adopted an additional report on the bill setting that loans underway are not to be affected by changes. The only exceptions are that fees that stay null for early loan repayment and loan re-financing will be negotiated by the lender and borrower. The European Commission has recently sent Romania a letter requesting information on Emergency Ordinance 50/2010 on consumer lending, which is a preliminary move before triggering infringement procedures. In October, the European Commission sent local authorities a letter requesting clarification on the way a European directive is transposed into Romanian legislation through Emergency Ordinance 50, after receiving multiple complaints on the transposition of Directive 84/2008 into local legislation. The Government Emergency Ordinance 50/2010 entails a more transparent bank interest calculation, linking the final interest to ROBOR or EURIBOR interbank rates, canceling the risk fee and, in case of loans with variable interest, canceling the reimbursement fee altogether. Consumers had expected a lowering of the interest rate – and consequently of their monthly installment, hoping banks would replace their internal interest rate with ROBOR/EURIBOR, while keeping the fixed margin at the same level. Banks have however kept the same interest level and changed the way it was calculated, which triggered the consumers’ discontent. Groups of unhappy customers have already started lawsuits against banks like BCR and Volksbank on this issue, while banks lobbied for the ordinance to be changed. Mediafax, Romania-Insider.com