Disputes continue to be the possibility for loan management companies to have access to the bank details of guarantors, collateral providers and persons associated with borrowers in the loans they manage.
The specific bill was discussed again on Monday in the Finance Committee of the Parliament, after the postponement of its vote in the Plenary Session of December 9th.
Amendment submitted by the parties ELAM, DIPA-Cooperation of Democratic Forces and Movement of Ecologists Cooperation of Citizens on the bill, aims to remove access to credit facilities management companies in the “ARTEMIS database”, as well as in the “database of the Department », In relation to the guarantors, the collateral providers and the persons related to the borrowers, in order to avoid the abusive use of the legislation against them.
On behalf of the Ministry of Finance, the Committee was informed that the Government bill that aims to address the great challenge of Non-Performing Loans (NPLs) should have been passed earlier by Parliament, as reflected in the Cyprus Recovery and Sustainability Plan. Failure to comply with this commitment, he said, could lead to non-disbursement of money. He also said that any amendment that makes it difficult to achieve the original goal, calls into question the achievement of the goal with a visible risk of non-collection of some money from the SAA. He noted that in case the management of the problem loans of Hellenic Bank, KEDIPES and the Housing Financing Organization (HSF) becomes difficult, then there will be financial consequences for the Government.
The Financial Commissioner Pavlos stated that the bill should have been passed, while there should be an amendment that mainly concerns the loans that had the abusive clauses and the violation of the law on guarantors. He added that the law should not be passed, allowing illegalities against some groups. Stating that of course the guarantor's asset should be checked for a restructuring, he said, however, that in the Cypriot reality there is a large number of trapped guarantors, which is a growth inhibitor. Regarding the amendment, he said that in it there are surpluses that create great insecurity for the proper implementation of these tools. As he said, there can be a more rational wording and pass the bill along with an amendment.
It was reported by the Legal Service that the amendment conflicts with several articles of the Constitution. It was also mentioned that the economic policy of the state is the responsibility of the executive power, in order to determine who will have access or not to the data and not of the Parliament, therefore the principle of separation of powers is violated.
Speaking after the end of the Committee, the President of Christiana Erotokritou stated that there are strong views on the controversial bill, which was discussed for the fourth time in the Committee. As he said, on the one hand, the bill creates the mechanism for the supervision of the CBC of credit facility management companies and on the other hand, it provides access to the data of borrowers, guarantors and their related persons, while as he said, a discussion is underway on how could this access be regulated in order to make this bill much fairer without allowing the abuse of its resources and provisions by any skeptic. Regarding the amendment of the parties, he said that it is in the right direction, however it needs to be processed so as not to lead to opposite results.
DIPA MP – Democratic Forces Cooperation Alekos Tryfonidis stated that the Financial Commissioner clearly states that he is the recipient of many complaints related to blatantly abusive clauses in the guarantee contracts and in a series of unprecedented and unprecedented violations of the Constitution. This, as she said, has been admitted before the Committee on Finance, the representative of the Ministry of Finance, adding that we should not solve these problems with this legislation, but with other legislation.
He added that they are strongly opposed to this unacceptable legislative proposal and will not allow possible abuses, excesses and improper management and behavior by these companies that may occur due to the passage of the bills. As he said, this proposal will be the beginning of a social unrest where the entire Cypriot people will be held captive by the Banks and the Credit Facilities Management Companies. He added that the party insists on its amendment, which tries to reduce any abuses.
He also wondered what is the policy followed regarding the purchase rates of loans by commercial banks and what are the rates of subsequent sale of these loans to credit facility management companies, because they hear about rates of 15 and 20% of the value of loans , so we are talking about huge profits at the expense of borrowers.
Environmentalist Stavros Papadouris said that he regrets that the Ministry of Foreign Affairs is blind and endangered, while he said that it is tragic that the Legal Service has identified issues of unconstitutionality in the amendment they submitted, feeling that the legislature intervenes in the executive branch. He challenged this, saying that it is not possible for parliamentary work not to be able to intervene in a possible misuse of the tools that will be given to management companies to protect citizens. He added that their amendment would proceed amidst dangers and threats. He also said that the issue of MES will end in the next two years, but the issue is how it ends and said that they will stand up to the circumstances by not allowing this continued impoverishment.
The President of the Association for the Protection of the First Residence, Michalis Paraskeva, in his statements after the Commission stated that the amendment of the parties is necessary to pass in order to protect the rights of mainly related persons, ie the guarantors from abuse of this measure. At the same time, he pointed out that the agreement between KEDIPES and Altamira provides for a 4% commission for the sale of mortgaged real estate and 0.5% for restructuring, so Altamira has little interest in restructuring a loan.
