Despite the submission of a revised bill, disagreements remain between the Government and Parliament on the bill that gives credit redemption companies and non-performing loan (NPL) managers the right to search borrower and guarantor data from the ARTEMIS database and the Land Registry, while the managers will be supervised by the Central Bank.
The Ministry of Finance has tabled an amended bill under which credit acquisition companies and trustees may not, without the express consent of the affected person, conduct a search in relation to data held in the ARTEMIS database which, in relation to the lending under investigation, relates to a collateral provider and/or a person related to the borrower.
In the case of guarantors, both credit purchasing agencies and administrators may not proceed with an investigation in relation to the guarantee contract of which a final court decision has been issued annulling the guarantee contract, which contains unfair clauses under the provisions of the Unfair Clauses in Consumer Contracts Act or the guarantor is released from its contractual obligations under the provisions of the Protection of Certain Classes of Guarantors Act.
It is noted that this bill is included in the conditions for the disbursement of the first tranche of European funds from the National Recovery and Resilience Plan.
The spokesperson of the Ministry of Finance, Avgi Lapathiotis, also said that the Ministry will submit a bill for legislative review to the Legal Service in January 2023 to transpose the entirety of Directive 2167/2021, which provides for transposition into national law by the end of 2023. He explained that there should be a transitional period because there will be market disruption due to banks' agreements with management companies.
He noted that with immediate adoption of the directive, the state-owned KEDIPES (which manages the former Co-operative's NPLs) will be disadvantaged by the inability of the management company (Altamira) to manage them effectively.
However, the Financial Commissioner Pavlos Ioannou, who also submitted a memorandum, disagreed with the amendments of the Ministry of Finance regarding guarantors, saying that if there is a Court decision, the guarantor effectively ceases to be a guarantor.
He added that there is no reference to the word guarantor anywhere in the directive and the draft action plan.
"Therefore, this proposed amendment does not safeguard the rights of guarantors, who as natural persons are involved in the procedure and therefore as consumers are protected by Directive 2167/2021," he said in his memorandum to the Commission.
Moreover, Mr Ioannou said that the problem relates to the mortgage to rent scheme related to the CEDIPES and the legal framework with the implementation of this scheme.
"What we need is a separate law for the KEDIPES," he said, adding that "we want to implement the directive and on the other hand we do not want to implement it to protect the KEDIPES."
Lapathiotis recalled that KEDIPES operates in a framework determined by the commitments it has made to the European Commission, while it works with a trustee and its work is hampered.
A representative of the Legal Service said that the Financial Commissioner's recommendations are not legally correct because they fragment the Directive without proper transposition into national law in its entirety. "It will lead to problems with the European Commission, which is competent to judge the correct transposition in decisions in national law," he added.
From the side of the Central Bank, it was stated that the aim of the amendments proposed by the Ministry is not to weaken the tool in the hands of credit institutions so that a bad asset can be transferred out of banks, adding that depending on the provisions, the capital adequacy of credit institutions may also be affected.
SYPRODAT director Jenny Papacharalambous expressed regret that no agreement was reached on the provisions of the bill and added that the revised text does not safeguard the abuse that can occur against guarantors.
President of the First Home Protection Association Michael Paraskeva referred to a note of the Auditor General according to which the agreement between KEDIPES and Altamira provides for a commission of 4.5% in case of sale of properties and 0.5% for restructuring, which he said favours auctions and called for the disclosure of the agreements made with the credit redemption companies.
On behalf of DISY, the party's Deputy Chairman Harris Georgiades expressed concern about the delay in the debate, which cannot be perpetuated. "We consider it important to complete the debate and bring it to the plenary session," he added.
Moreover, AKEL MP Aristos Damianou, without going into the substance of the revised texts, said that we believe that "in no case are the legitimate concerns of borrowers satisfied and in no case will AKEL consent to express procedures outside judicial control. "We consider that (the bill) was suffering from the very beginning and is still suffering today."
For his part, Ecologists MP Stavros Papadouris said that the insistence is clear and concerns KEDIPES and its manager, Altamira and added that until a happy medium is found, the amendment he tabled remains. He finally said that the Ministry of Finance's complaints about guarantors are not justified, since nowhere in the European directive is there any reference to guarantors.
Source: CNA
Contents of this article including associated images are belongs Cyprus Times
Views & opinions expressed are those of the author and/or Cyprus Times
Source
