The bill to reform consumer credit and credit revolving presented by the Minister of Economy, Mrs. Christine Lagarde, Wednesday, March 24 at the National Assembly is slightly different from that adopted in the Senate June 2009.
Key points of reform:
- Changing requirements for advertising and information. It is an end to attack ads on revolving credit or “cash reserve”. The actual rate will no longer be at the bottom of various small advertisements and will be the same size as the promotional rate of call. The consumer can more easily compare offers from different credit agencies through a standardized information. Only the term “revolving credit” will be used, all other terms (reserve money, revolving credit account available) will be banned. Finally, any advertising will be referred to the message ‘credit urge you and must be repaid.
- Loyalty cards instead of credit cards. Consumer groups and the parliamentary opposition wanted the consumer can make the difference between loyalty cards, credit card and payment card. It is practically done: the permits must include a cash payment function. The function of credit payment can be triggered with the express consent of the client. In addition, the revolving credit will be amortized to a minimum the legal minimum, and not just the interest are repaid within three to five years.
- Information on the creditworthiness of borrowers. A card “dialogue” based on the point of sale or at a distance, the lender will detail the resources, expenses and loans outstanding, with the provision of evidence. The positive file of debt, particularly desired by the consumer, has not been retained. For cons, the Bank of France is responsible for drafting a report on the advisability of establishing a register of loans to individuals within eighteen months, and over three years. The current roster of payment problems (FICP) will be strengthened by the inclusion of a mechanism of preventive alert and study of local experimentation, eg county, a positive file.
- Fact Sheet pre. Before the consumer is bound by a contract or an offer of credit, the lender must obtain an information leaflet and a separate supply contract.
- Extention of deadline for withdrawal. The borrower will now have to fourteen days, seven currently cons, to disengage.
- Insurance of loan. The cost of insurance will be included in advertising and the offer of contract.
- Rate of wear. The loan rate will no longer be determined according to their nature but their amount. The threshold limits should remain around 20% for loans of less than 3,000 euros, between 15 and 18% for loans of 3000-6000 euros, down 14% for loans with a higher amount. This measure will facilitate access to personal loans, less expensive for small amounts.
- Prepayment. In case of redemption within one year, the lender may request a compensation that may exceed 0.5% of the loan amount. If the claim involved more than a year after the subscription of the loan, the compensation may be higher but not more than 1%.
- Over-indebtedness. The duration of the roster is reduced to FICP five years. The composition and functioning of committees of indebtedness is amended, and the procedure. The costs taken into account in the remaining lifetime costs include health, child care. The period of study of the records by the Committee indebtedness is reduced to three months instead of six. The bill provides for an automatic stay of claims of creditors when the case is admissible. The commission may impose certain measures without requiring that the judge gives them enforcement powers.
- Micro-credit. Individuals can finance microcredit associations via a web platform. Banks will be obliged to disclose their actions in this field.
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