Polish Bank Association

General remarks

1. The initiators of the Document assume that consumers having problems with fulfilling credit obligations are open for the cooperation with the bank as well as are trying to demonstrate the initiative in every case. It is a right attitude of the majority of borrowers. One should however also remember that in practice some customers are avoiding the contact with the bank or are interested exclusively in unconditional redemption of the whole liabilities. In order not to block further proceedings of banks in such cases, it seems essential to introduce clear stipulation that the bank is entitled to continue, based on appropriate foreclosure procedures, debt collection action, where there is a lack of reply from the customer or it is limited to demanding attitude only - this remark refers in particular to principles of Guidelines determined in point 2.

2. The situation to which the Draft Guidelines refers to is, in principle, difficult both for the bank, and for the customer as well as it almost always is integrated with negative emotions. One should so assume that some consumers will be trying to abuse some of Guidelines, which - in their own interpretation – give them alleged entitlements, e.g. enhancing their legal position in the relationship with creditors based on the legislation being in force in the Member States. This is why it is so essential that in the final version of the Guidelines one should avoid expressions which could facilitate such attitudes or showed that Guidelines could not constitute the base for disputes between banks and customers.

Specific comments

Introducing an obligation for creating procedures predicting possible problems of consumers with the repayment of credit is a standard with which it is hard to argue. However from a point of view of practical and legal banking capabilities it seems practical to limit the scope of the this obligation to data collected and processed in due course by banks. It is hard to expect so that customers agree at filing the loan application to advise the bank e.g. of hereditary diseases appearing in their families (what can affect their creditworthiness in the perspective of 20-25 years) or, periodically, informing about the financial standing of the employer.

An assumption that customers will be, in every case, interested in the participation in the meetings with the bank is a weakness of the Guidelines. Based on lenders’ experience, consumers can also avoid contacts with bank or are trying to present in public medias their problems in the credit repayment as a dispute allegedly victimized consumer with the bank.

The Guidelines should not implement new obligations for lenders which are not outcome directly from the Directive on credit agreements for consumers relating to residential immovable property. In contrary, one should show in the final version of the Guidelines, whether contents of this point can be filled up by the Member State existing legislation. And for example in Poland information about the consequences of the lack of not fulfilling credit obligations by the consumer is being provided already in every loan agreement, that is the basic document defining relationship between the borrower and the lender. And there is really no need for repeating this information to the customer at every situation - the more because such information can be treated by customers as exerting the prohibited unofficial pressure.

Next, the determined obligation in the b) sub point requires clarifying information as for the scope of expected information, which should be provided by the bank. Whether it is about appropriate ADR scheme, institutions providing free legal advice or the social support centre? Without these explanations it will be hard to fulfil this obligation and to adapt right local structures to this requirement.

It should be clearly indicated in the Guidelines, that the lender is not obliged to use at least one (or more) restructuring instruments being determined in this point. The bank should have the right also to choose form of appropriate methods and foreclosure procedures - also in the interest of depositors which paid funds on banking accounts.

This point should be constructed with the special care, as it can have a key importance for the future of the mortgage loan market. On the one hand it can encourage consumers to enter into certain forms of moral hazard", and on the second it can become one of crucial factors in analysis of the credit risk."
No additional requirements are considered necessary.
Norbert Jeziolowicz