Govt Submits Bill On FX Loans

(MTI) – The government submitted to parliament on Friday the first bill aimed at helping FX loans holders by settling certain issues in contracts signed with the banks in line with the supreme court Kuria’s recent legal uniformity decision.

Related article: Top Court Rules On Fairness Of FX Loan Contracts: Forint, OTP Shares Rise

According to the justification to the bill, the proposal seeks to eliminate unfair provisions, but in a way that the retained contracts can still be fulfilled.

If the bill is passed into law, it will void rate margins, the application of different rates for buying and selling foreign currency, and will ensure that the forint value of FX loans as well as instalments are calculated at the central bank’s official rate. The same rule will apply to all fees and extra costs connected to the loan.

The new legislation will stipulate that banks are primarily responsible for the removal of unfair terms from existing agreements.

After the law comes into effect, on the eighth day of its promulgation, financial institutions will have ninety days to convert the loans and the repayments retroactively. On the basis of this conversion, they will have to settle accounts with loan holders in line with a separate law to be passed during parliament’s autumn session.

Justice Minister Laszlo Trocsanyi said that the bill was the first step in a process which, including a second law in the autumn, will “correctly settle the forex loan issue in a way acceptable to all parties” by the end of the year.