Central bank steps in the ANPC – banks dispute: The current disputes to be solved by the courts

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The sanctions recently applied by the National Authority for Consumer Protection (ANPC) to a significant number of credit institutions have brought the topic of banking consumer protection into the public discussion, writes the adviser to the National Bank of Romania Governor, Cristian Bichi on the Central Bank blog.

The National Authority for Consumer Protection (ANPC) said it had identified deceptive commercial practices committed by a number of 19 banking institutions “regarding the method of calculating rates, in that on the repayment schedule, the rate was composed, in the first years, of 25 % of principal balance to be repaid and 75% interest.

Through this method of calculation, consumers mainly paid interest.” Consequently, ANPC sanctioned the banks in question with a fine and issued an order requesting them to “issue new repayment schedules, where the principal of the loan due must be paid by consumers in equal installments over the entire lending period in relation to the interest related to the credit “, says the NBR adviser.

The Romanian Association of Banks (ARB) issued a statement stating that the erroneous information released in the public space, which categorizes as “deceptive commercial practices” a legal method of interest calculation used all over the world, raises questions about the professionalism of some ANPC employees.

For CEC Bank, a bank with state capital, “the control was done quickly before, and the culprit seems to have already been known before the completion of the investigation”. For their part, several economic analysts have weighed in on the debate stating that it is mathematically impossible to generate a repayment schedule where principal and interest flow equally.

The ANPC measure was also criticized by an official of this authority who wanted to mention that the repayment of the loan in equal installments (annuities) is legal and that issuing new repayment schedules in accordance with those requested by ANPC orders would be “obviously abusive and without foundation”. Therefore, as the Romanian press headlines, we are in the middle of a real scandal, which is to be settled definitively by the courts, in a more or less near future, the NBR adviser also said.

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