From an initial reading of the changes announced by the government regarding the Code of Conduct, as well as other improvements aimed at strengthening bilateral loan settlements, sources from the servicers stress that they must first see the bill in order to have a well-founded opinion.
And this, because there had been no prior consultation between the Ministry of National Economy and Finance and the managements of the companies in question.
“We cannot assess the changes accurately since there was no dialogue,” sources from the Claims Management Companies sector stress and add: “from a first rough reading of the material that was published, it emerges that there are gray areas, which will be clarified when we have the interpretative texts at our disposal.”
One of the most complex points of the changes concerns the obligation of creditors to provide the borrower with a full loan history. According to competent sources, this is almost impossible for, for example, consumer loans and card debts, as there were bank mergers and the loans were transferred from one bank to another, a fact that makes this obligation difficult.
Under consultation
From the side of the Ministry of National Economy and Finance and the General Secretariat for Private Debt Management, it is stressed that the bill will be introduced for consultation immediately, therefore the process will be open to any comments.
According to the Ministry of National Economy and Finance, the entirety of the proposed changes therefore moves toward strengthening the framework of provisions for private debt: a clearer settlement process, a standardized and documented settlement proposal, increased transparency and supervision of servicers, and enhanced protection and provision of incentives to consistent debtors. The main changes, among others, concern:
- The replacement of the Code of Conduct. A new, autonomous and standardized bilateral settlement process is established, which does not depend on whether or not the debtor resorts to the Out-of-Court Mechanism (i.e. the debtor has the possibility of resorting to the Out-of-Court Mechanism as well).
- A maximum limit on the down payment (15%) that may be requested by the creditor in the event of a settlement is set.
- A maximum limit is imposed on the accrual of interest on old overdue debts
- For the Hercules securitizations, in addition to the provisions already in force, an annual independent management audit is established for the servicers managing securitizations that are linked to the guarantee of the Greek State. The audit will cover, among other things, the fees and expenses of the persons involved and of the manager. It is also provided that a summary of the findings will be published and that the full report will be transmitted to the competent authorities and to the Bank of Greece.