The Parliamentary Committee on Energy, Trade, Industry and Tourism welcomed the issuance of the first court decision on the issue of abusive banking clauses, following an briefing on Tuesday by the Legal Service.
Complaints and criticisms were heard in the Commission against the banks, during the ex-officio examination of the issue of charges and commissions by the banks and the inclusion of abusive clauses in contracts. The issue was examined ex officio following a proposal by MPs George Perdikis, Stefanos Stefanos, Pavlos Mylonas and Marinos Mousiouttas. Also, following a proposal by MPs Kyriakos Hatzigiannis and Andreas Kyprianou, the high amounts that citizens have to pay to banks in order to secure details of their accounts were examined.
On behalf of the Legal Service, Frosso Sotiriou stated that out of the three applications submitted by the Consumer Protection Service regarding abusive clauses, two are pending in court and a decision was issued on the third on 25 February. Based on the decision, a decree was issued according to which some clauses are recognized as abusive, opacity is mentioned and an immediate cessation and non-continuation of the application of these clauses is ordered. On the basis of this decision, he said, the other cases are proceeding. He also stated that there is no intention to withdraw a case for abusive clauses.
The Financial Commissioner, Pavlos Ioannou, referred to cases of refusal by the banks to accept his decisions for abusive clauses and for refusal to issue statements of accounts as a result, as he said, of the absolute “monopoly power of the banks”. He spoke of a case of an elderly British resident of Cyprus in which a bank refused to issue an account of his deceased wife to show that he was a co-owner. The commissioner said he was expected to rule on the case.
He also spoke of excessive demands on the part of banks for the issuance of statements and certificates, when such a thing should be done for free or with a reasonable charge.
At the same time, he said that it is tragic that a banking institution, while accepting its decision in case of abusive clauses, then refuses to apply the same decision in another case. As he said, from the moment the abusive nature of a specific clause was accepted, the banking institution should clear all the contracts from the specific clauses.
He also noted that the staffing of his office with additional staff was blocked on behalf of the banks by the Financial Council.
On behalf of the Central Bank (CBC) it was reported that a supervisory audit is being carried out and a specific study was made on the real charges of the banks, on the basis of which a suggestion was made to the Ministry of Finance and a ceiling was set. It was also reported that the CBC has established a grievance mechanism on the issue of loan restructuring.
On behalf of the SYRODRAT Borrowers Association, Jenny Papacharalambous complained, among other things, that the Consumer Protection Service of the Ministry of Energy has no power to demand the return of the money with which the borrower was over-indebted, that banks sold loans to companies that sold interest rate, and that they ask borrowers to make an affidavit that if their loan restructuring is not successful they will not go to court.
On behalf of the Association of Banks, Elena Frixou stated that there are mechanisms and framework for dealing with these issues such as recourse to justice or the Financial Commissioner. He also said that the banks are informed and comply with the CBC instructions on restructuring. He also expressed hope that institutions and legislation would become more effective.
Representatives of the banks in the Commission pledged to convey the concerns of Members and citizens to the banks and to put themselves in writing to answer the questions raised.
The positions of the parties
Speaking to reporters, the Chairman of the Committee, DISY MP Andreas Kyprianou, said he was surprised by the position of the Financial Commissioner that banks often refuse to give an account statement from the day the loan is launched until today, with the result that the borrower can not go to a financial advisor to see if the charges against him are fair.
He also said that the banks' charges are very high. He expressed satisfaction because, as he said, through the discussion, the assurance was given that the charges will be reconsidered. He also expressed satisfaction for the trial before the court of a case for abusive clauses, with very positive results for the borrowers. Such decisions, which are now doomed, he said, will greatly help all borrowers to restructure their loans.
Mr. Kyprianou said that the impunity and speculation of the banks is a given in this place and the society and the political parties have shown with the session that they will no longer tolerate speculative behaviors against the citizens. He added that consumer legislation is being completed and will include natural persons and separate legislation for micro-enterprises.
AKEL MP Stefanos Stefanou said that through the discussion of the issue it was confirmed that the banks are “arbitrary and incompetent” to the detriment of consumers. This arbitrariness, as he said, was nurtured by the fact that the Alarm Government, through the various legal frameworks that govern the operation of the institutions, removed or truncated everything that has to do with control but also with what it can reduce the arbitrariness and impunity of banks. He added that Cyprus has complaints in the EU, because it does not apply the European clauses concerning abusive clauses and consumer protection. He added that the Consumer Protection Service does not have the authority to indemnify in relation to abusive clauses and to recover damages from consumers in relation to abusive clauses and over-indebtedness.
Mr. Stefanou also said that the banks are arbitrary, due to the changes made in the legal framework for the sales in 2018 with the disagreement of AKEL and other parties, which removed the possibility for borrowers to receive effective legal assistance. He also noted that a sign of the Government's unwillingness to control the banks is the fact that the bill sent by the Government and is being discussed in the Trade Committee was desperately delayed, but the bill itself has shortcomings and problems and a lot of work is needed to have a multi-bill. to help consumers deal effectively and quickly with bank arbitrariness. At the same time, he noted the delays in cases of abusive clauses in the consumer protection service and the Legal Service.
DIKO MP Pavlos Mylonas said that what was heard from the Financial Commissioner was shocking, regarding the allegations about the abusive clauses and the refusal of banks to treat their customers with dignity. Also for the fact that the Commissioner complained that the Association of Banks vetoed the hiring of additional staff in his office. He wondered who controls the banks and said that unfortunately, there is a gap.
“That is why we, as a legislature, are obliged to resolve it as soon as possible,” he said.
At the same time, he said that the first court decision on the abusive clauses, can be a precedent for many other cases, justifies all these people who are at the mercy of the banks' dispositions.
EDEK MP Elias Myrianthous said that despite the calls to the banks to implement practices that will respect consumers, their customers, however these calls fall into the void and into the ears of the deaf. He also said that their dominant position in the market, operating under an oligopoly regime, but at the same time the criminal inaction and silence of the competent state institutions, leads them to unacceptable practices of blackmailing borrowers, often threatening them with property sales.
He added that EDEK has submitted relevant amendments to the Law on Courts, which will be discussed next Friday in the Parliamentary Legal Committee and with which it seeks to regulate all these arbitrariness of banks, providing the borrower with the legal tools, appealing to the Special Court. to be able to request both the cancellation of the abusive clauses and over-indebtedness that exist in the loan agreements but also to be able to suspend the sale process. He also said that for a long time EDEK submitted proposals for a law to amend Law 87/2018, which was voted by DISY and DIKO, which deprived the borrowers of the human right to go to court in order to suspend the arbitrary sales. of banks. He appealed to the Chairman of the Finance Committee to put these proposals up for discussion immediately, without further delay.
“Solidarity” MP Michalis Giorgallas stated that the lack of harmonization of Cypriot law with the European directive on abusive clauses and the lack of adequate judicial measures to protect borrowers, unfortunately, are a criminal offense. they see banks swindling and accumulating huge amounts in their loans that they will never pay. He also stated that this looting must finally stop with the Ministry of Finance, the Central Bank and the Parliament having to bear the burden that falls to them. He also said that there is a specific court decision that can be a guide and a lifeline, in order to finally start and at the level of courts to raise hopes for over-indebted borrowers.
Co-chair of the Democratic Forces Marinos Mousiouttas said that the banks, if they need the help of the state and the Parliament for various legislations, should have more open ears to what people say and how people feel about these charges. He added that there are people who are also technologically illiterate, so they can not use the technological means to be served by the banks and therefore everything that the banks have put is excluded or charged. Regarding the issuance of the first decision on the abusive clauses, he said that this decision will be used as a navigator for the continuation of other cases. He added that this much-discussed issue should end with the help of the state, the Parliament and the banks, so that these unjust charges to the world do not exist and at the same time the banks can operate within the framework provided by law, even and with less profit.
The MP of the Movement of Ecologists – Citizens' Cooperation, George Perdikis said that unfortunately the banks continue to treat their customers in an abusive and absolute way and with a mood of scandal. He also complained that when the Finance Commissioner was asked to increase the staff of his service for the operation of provincial offices, the representatives of the banks participating in the Finance Council blocked the process, as the Commissioner himself complained.
Philenews / ΚΥΠΕ
