Romania’s Parliament adopts the controversial “giving in payment law”

Romania’s Chamber of Deputies adopted the law that introduces giving in payment as a way to discharge mortgage debt. The deputies voted in favor of the bill almost unanimously (207 votes for and only 1 vote against), on Wednesday, April 13. The law’s final form includes several important changes compared to the form the Parliament adopted at the beginning of this year, which President Klaus Iohannis sent back for review. The new law exempts the First House state-subsidized program, which means that those who take mortgage loans under this program can’t use giving in payment as a way to discharge their debt. The maximum threshold for which the law applies was also increased from EUR 150,000 to EUR 250,000. The law also states that giving in payment can be used by clients who have already defaulted on their loans and shoes properties are currently being sold by the banks. The law, which has been strongly opposed by Romania’s National Bank (BNR), by commercial banks, and business organizations, will be sent to the President for promulgation. The President can’t send it back to the Parliament a second time and the law can only be contested at the Constitutional Court, which will decide if it violates any constitutional rights, such as the property right. The giving in payment law makes it riskier for banks to grant mortgage loans, which is why some local banks have already increased the down payment for new mortgage loans. Romania’s Senate approves law on giving in payment Top bank CEO explains how the new law on mortgage loans will change the lending process in Romania International investors, concerned about Romania’s law on mortgage loans Fitch: Romania’s new law on mortgage loans could disrupt local banking system Save the Children NGO, unhappy with Romania’s new law on mortgage loans editor@romania-insider.com