Cenbank orders removal of disputed annex from conversion contracts

The Croatian National Bank (HNB) on Tuesday demanded that commercial lenders remove controversial provisions from an annex of contracts on the conversion of Swiss franc-indexed loans into euros, and Erste&Steiermaerkische Bank has already promised that it will adjust the annex to instructions from the central bank.

The instruction refers to provisions on the consequences of a possible annulment or revocation of legislation on consumer lending which regulates the conversion. Those provisions are criticised by loan takers as being extremely detrimental to them.

"The Croatian National Bank (HNB) has requested the banks which we have learned to have incorporated the provisions on the consequences of a possible annulment or revocation of legislation on consumer lending into the annex of the conversion contracts to omit those provisions which many be in contravention with rules on consumers' rights. We are in touch with the banks and we expect them to act upon our request," the HNB said in a statement on Tuesday.

The Constitutional Court has launched the procedure to assess whether the legislation regulating the conversion of Swiss franc-indexed loans into euros complies with the Constitution and the two disputed laws will remain in force until the Court arrives at a final decision, according to last week's statement from Court President Jasna Omejec. 

Eight commercial banks and four individuals had requested the Constitutional Court to assess the constitutionality of the two laws regulating the conversion. The complainants also requested the suspension of the laws they dispute until a final ruling, however, the Constitutional Court, which considered the suspension request, turned down that proposal.

Both laws contested (by the lenders) remain in effect and have to be complied with, Omejec said last week, but she could not specify when the final ruling on the said legislation might be expected.

The annex with the controversial provisions angered Croatian Finance Minister Boris Lalovac who on Tuesday scheduled a meeting with the HNB Governor Boris Vujcic.

He said that he was surprised by the "arrogance" of the banks, as evidenced through the incorporation of those provisions into the contracts, which envisage a retroactive application of a possible annulment of the conversion.

Associations of CHF-indexed loan holders also complain about differences in interest rates which banks apply to the same types of loans.

Last update: Tue, 17/11/2015 - 17:05

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