• Guideline 1: Establishment of policies and procedure
1.1.: It is necessary to allow some flexibility with regard to early detection of a borrower’s financial difficulties. Indeed, while the FBF does not dispute the need for procedures for early identification of consumers’ financial difficulties, this must be on a best-efforts basis and should not be an absolute obligation. Accordingly, we suggest adding to the sentence: “The creditor should establish procedures to detect, as far as possible, early indications of consumers’ going into payment difficulties.”
• Guideline 2: Engagement with the consumer
2.1.: This guideline must target more explicitly the initiatives that are up to the consumer, who must not stand by passively if there is a worsening in his financial standing.
2.2.: To allow greater flexibility in practice, this guideline should be modified as follows: “The creditor should conduct meetings interviews with the consumer in relation to their payment difficulties in privacy having regard to data protection legislation and not disclosing personal information to a third party without a consumer’s consent when required under applicable law.”
Indeed, in practice, consumers are very often very reluctant to cooperate with the bank and refuse to take part in any meeting. These difficulties must be reflected.
• Guideline 3: Provision of information and assistance to the consumer
This guideline should be renamed to: “Provision of information and assistance to the consumer in, or concerned about, payment difficulty”, as it targets only a certain category of consumers.
3.3: Under item c) the following should be added: the charges incurred … “known by the creditor”
3.4.: “Information about available government/public schemes or support” are the responsibility of public authorities and not lenders, who should not be required to assume the duties of social workers or associations, including when the lender is, in part, a social stakeholder. Moreover, premature disclosure by the lender regarding the public assistance mechanism could have the effect of lessening the borrower’s feeling of responsibility.
• Guideline 4: Resolution process
4.1.: It is essential to take into account national statutes of limitations. The following sentence could be supplemented as follows: “Forbearance measures consist of concessions towards a consumer facing, or about to face, difficulties in meeting his/her financial commitments, in accordance with national time limit on the validity of claims on outstanding payments”».
For example, in France, the two-year time limit for unpaid mortgage loans does not appear to be compatible with the “reasonable tolerance” required before beginning a foreclosure procedure.
Meanwhile, the refinancing of an overdue loan (item 4.1 1) could present a risk that the lender could be accused of a sort of “abusive support” (such as this notion exists, for example, in French commercial law) if the consumer is still unable to pay.
• Guideline 5: Documentation of dealings with the consumer and retention of records
The FBF is firmly opposed to this guideline, as it would be an additional and unjustified source of litigation.
For an obligation to retain documentary proof of the appropriateness of the proposed solutions which would be very burdensome administratively, is of a subjective nature in the explanation to be provided and presents a risk of dispute of this choice before a judge, as the burden of proof would be assumed solely by the lender.