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Romanian bankers fell in their own trap

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2010-10-09 19:42

Romanian bankers are walking into their own trap as a new law regarding loans costs triggered hundred of bank clients to sue some credit institutions in order to get lower costs.rnrnThe new law in force starting June 20, 2010 (Emergency Government Ordinance-OUG 50), an implementation of EU Directive 2008/48 on Consumer Credit is now in Parliament to be adopted, where bankers are making hard lobby to be modified.rnrnThe banks do not agree with new law provisions regarding interest rates setting (EURIBOR plus a fixed margin) to be applied also to existing loans not only for new credits.rnrnBut the government did not take into consideration bankers complains so they decided to maintain the old interest rates levels, settled after their own, opaque formulas, transformed now in a new formula: EURIBOR plus a fixed margin which reflects bank risk, cost and profit.rnrnBut the fixed margins have in many cases very high levels, such 9 or 10 percent, much more than new loans margins or other competitors margins. rnrnOn the top of this, banks clients complain that costs will only rise in the future, as EURIBOR, at minimum records, is expected to increase.rnrnIn addition, some banks are facing fierce accusations from clients and consumer regulators which discovered illegal costs and contract abuses.rnrnHundreds of Romanians are preparing to sue some banks to get back some commissions and interest rates they say banks illegally took.

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