After the meeting of the Parliamentary Finance Committee, which took place 17 July., the adoption of a new law on the support of the Frankoviches was announced for October of that year. The case is so burning that banks have not yet been settled for unlawful provisions in the contracts. The NIK report, published the day before the committee's work, also showed that the state institutions responsible for consumer protection failed to fulfil their task.
The problems of the Frankowiczs have been going on for years, but so far the majority of financial and administrative pathologies have not been solved, which accompanied the borrowing in francs. In the latest report, NIK proposes, inter alia, to introduce the personal responsibility of financial institutions managers for violating consumer protection rules.
Unlawful UnwWW contributions
one of the main problems the credit case exposed to in francs is the application by banks of unlawful provisions in contracts with their customers. Moreover, the banks did not respect the judgments of the courts which considered that the clauses on the low-market insurance (UNWW) of loans relating to the Swiss franc were not permitted.
When a few years ago the course of the franc began to grow rapidly, it turned out that borrowers would have to pay the UNWW contributions even if during the course of the contract they paid off the insured part of the loan.
The borrowers in many cases contested such proceedings by the bank and the courts, after the examination of the contracts, generally argued that the UNWWW contributions were unlawful and resulted from the application of unlawful provisions in the contracts (cf. the register of prohibited clauses).
According to the UOKiK website, banks under the terms of the court paid their customers the fees charged for the contested contributions, but at the same time called on them to secure the loan in a different way.
For example, Bank Millennium proposed to borrowers or to increase the credit margin by 0.5 a percentage point or a monthly commission for increased risk of the bank.
„Such a practice of the bank offset the effects of final sentences. The courts considered that the provisions relating to the insurance of a low own contribution were not permitted, and Millennium replaced them with new, costly safeguards for customers," says Marek Niedy, President of the Competition and Consumer Protection Office."
Following the intervention of the President of UOKiK Millennium, he waived the requirement for consumers to provide additional safeguards. He also offered to send customers proposals for annexes to credit agreements. According to them, the provisions on the UNWW will be deleted from the agreements and no other safeguards will be entered in return. By the way, UOKiK asked 19 other banks whether they respect UNWWW judgments. They all assured that they would reimburse consumers for their claims.
NIK exposes the shortcomings of the consumer protection system
Bank activities are one, And allowing such deception is second. The Supreme Chamber of Control assessed the negative effectiveness of the consumer protection system against the problem of foreign currency-risk loans in the years for which banks have been active in providing these loans, i.e. 2005-2013.
Audited entities of public administration (Office for Competition and Consumer Protection, Financial Supervision Commission and Financial Ombudsman), as well as third urban consumer advocates (in Warsaw, Krakow and Olsztyn) did not ensure proper enforcement of the rights of borrowers and too late or inadequately countered the risks arising from the nature of these loans and the unfair practices of banks.
The weakness of the consumer protection system was one the factors that have allowed the volume of loans to rise to a scale where the current elimination of their risks would entail significant costs for banks or indebted citizens.
NIK calls for consumer protection to be strengthened by the introduction of personal responsibility for infringements of consumer protection rules by managing financial institutions. However, this is so difficult that legislation in Poland still does not regulate the work of institutions responsible for consumer protection sufficiently.
Individual offices do not have the flow of information between themselves, and their competence is often insufficient or inadequate to their needs.
The Supreme Chamber of Control assessed the negative effectiveness of the consumer protection system against the problem of foreign currency-risk loans in the years for which banks have been active in providing these loans, i.e. 2005-2013.
Presidential Act with positive government opinion
The problems of the Frankowiczs are therefore the summing up of the administrative mess that the banks have used, introducing abusive clauses into the contracts. The government is quite sluggish in its support for victims.
However, following the publication of the report of the NIK, at the meeting of the Finance Committee, a promise was made that the Act on the rules for the repayment of certain claims resulting from credit and loan agreements would enter into force in the autumn (print no. 811).
In August 2017 The President submitted to the Sejm a draft amendment to the same law, including a double increase in the income minimum for requesting support. According to the proposal, this would be a situation where the costs of loans exceed 50% income (so far has been 60%).
In addition, the amount of possible monthly support from 1,500 to 2,000 PLN, extended period of possible support from 18 to 36 months (total amount 72,000 PLN) and an extended period of interest-free repayment received from the Fund of support from 8 to 12 years.
It would also be possible to waive some of the support commitments, particularly in the event of regular payment of instalments. The President of the Republic of Poland has submitted a total 29 amendments to this draft. They were consulted with the government and almost all the government assessed positively.
"This opens the possibility for the Sejm to adopt" - said the head of the Finance Committee Andrzej Szlachta (PiS), announcing at the same time that October of this year is a real deadline for the adoption of the new law.
Currently in the Sejm are four draft laws on Frankovich. They are dealt with by a special subcommittee headed by PiS MP Tadeusz Cymański.
In August 2016 The President of the Republic of Poland directed the so-called "Anti-Spread Act" to the Polish Parliament, providing for the reimbursement of benefits which creditors obtained at the expense of customers in connection with the use of so-called "foreign spreads" determined by their own unilateral decisions.
The law is intended to apply to consumers, as well as to those who conduct business activities without tax write-offs in connection with loans.
PO and Kukiz[15] considers the provisions of presidential laws too liberal for banks. The PO project assumes what was originally included in the President's Chancellery project, it is that the borrower could apply in his bank to overvalue his mortgage in foreign currency, i.e. in francs.
The conversion would take place at the exchange rate from the date of the restructuring agreement and would be to calculate the difference between the value of the loan after the conversion and the amount of debt that the borrower would have at the time if he had entered into a loan agreement in PLN in the past with the bank.
The bank would decommission part of that amount. If the difference was a negative value, it would not have been decommissioned but would have been an obligation on the borrower in its entirety. However, implementing such an idea could cost too much and undermine the foundations of some banking institutions.
According to the President's Chancellery, it would cost banks to overvalue. 30 – 50,000,000,000 PLN, While return spreads would cost them 3 – 4,000,000,000 PLN.
It's also filed by Kukiz' club[15] The civic project, which assumes that loans in gold and loans denominated in foreign currencies will be equalised, which is supposed to mean that they are treated as if from the beginning they were loans in gold. This project strongly supports the Frankish community, but it is not realistic that it will enter into force.
Author: Katarzyna Kołbuś
Editor leading RB Magazine. From Over 10 years related to industry press, including the Financial Gazette and portal ipip.com.pl, which is devoted to finance, taxation, law, politics and the economy.