The Verkhovna Rada of Ukraine (VRU) plans to regulate activities of credit brokers. The corresponding draft law №2455 “On Consumer Lending” has been endorsed in the first reading at the second time by 236 people’s deputies, RBC-Ukraine reports.
“The obligation of the bank or other financial institution to appraise creditworthiness of the lender is legally established. Thus, the necessity to conduct such appraisal will be not only the requirement of regulatory legal acts of the National Bank of Ukraine, which refer to bank risk management, but will be the legislative requirement”, as it is said in the explanatory note.
According to the opinion of authors, the introduction of such obligation for nonbanking financial institutions will put all lenders on equal footing.
It is supposed that the calculation of the effective rate will include all interests under loan and payments for other services of the lender, connected with the loan. This requirement will be applied only if marketing materials contain any data (figures) on consumer expenses.
The document regulates activities of credit brokers, which is still not regulated.
The draft law also stipulates the change of order of repayment of obligations under agreement on consumer loan. Primarily the amount of overdue exposure will be repaid, secondarily – current payments of the principal of loan and interests, and then – the amount of fine sanctions.
“As per most recent version of the Civil Code of Ukraine the main amount of exposure (“principal of the loan”) is paid on the third-priority basis, and fine sanctions - as the second priority, which leads to the fact that consumers find themselves in the situation, when all available funds are directed to the repayment of already charged fine sanctions, and the exposure itself does not decrease, because interest base does not decrease. Basically, this becomes the “endless calculator” for the lender. He will not be in position to repay loan and exposure under it”, as explain the authors of legislative initiative.
In addition, the document contains norms, which regulate the issues of provision of additional and collateral services under consumer lending agreements.
In addition, before the conclusion of the agreement the lender should be able to inform the consumer about the estimated cost of third parties’ services (insurers, appraisers etc.), if he knows how much it is. The draft law does not obligate to include the cost of third parties’ services into the calculation of effective interest rate and aggregate cost of the loan, considering that such cost is not always known to lender
