Yesterday, the government adopted a proposal for an amendment to the Consumer Credit Act, which foresees an increase in fines for banks in case of violation of the law or damage to clients.
At the beginning of September, the Government adopted the proposal of the Law on Consumer Credit, which the Parliament has not yet expressed its opinion on, so with the current amendment the Government is changing its proposal from a month ago.
Now, with the amendment, the previously proposed amount of fines from 1.000 to 20.000 euros are replaced by the words from 10.000 to 40.000 euros, and from 750 to 6.000 euros are replaced by the words from 2.000 to 12.000 euros, while the amount of fines for physically responsible persons in the bank is changed from 400 to 2.000 euros on amounts from 1.000 to 4.000 euros.
With this proposal, the fees for processing and early repayment of housing loans are abolished by law, and the highest allowed effective interest rate on consumer loans will be introduced. Consumer loans include housing loans, non-purpose cash loans, cash loans for pensioners, mortgage loans, reconstruction and adaptation loans, refinancing loans, motor vehicle purchase loans and education loans.
In addition, novelties are being introduced in the part of assessing the creditworthiness of consumers, so that creditors are now obliged to establish procedures for early identification of consumers who may have difficulties in paying, and to establish contacts with them in order to find the best solutions for continued loan repayment.
It is also a novelty that before starting enforcement proceedings, creditors must try to reach an agreement with consumers on the collection of obligations, which includes the obligation for the creditor to propose measures to facilitate the repayment of the contract in such circumstances.
The Association of Banks of Montenegro previously announced that this law surprised them because this version of it was not on public discussion, and that its application would negatively affect the operations of the banking sector, which is the healthiest part of the Montenegrin economy.
In the explanation of the changes to the amendments on penalties, it is stated that the amounts of fines are increased for the offenses established in Article 74 of the Draft Law.
"The amendment is proposed at the initiative of the Central Bank of Montenegro, which was sent to the Ministry of Economic Development on September 23, 2024, after accepting the initiative to determine the highest allowed effective interest rate on consumer loans (Article 52). Namely, after additional consideration of the misdemeanor sanctions prescribed by the Draft Law, it was concluded that Article 74 of the Draft Law prescribes the so-called "regular" fines in accordance with Article 24 paragraph 2 of the Law on Misdemeanors, i.e. the possibility established by Article 24 paragraph 6 of the Law on Misdemeanors that for certain areas, including consumer protection, fines of up to double the maximum from paragraph 2 of this article, which is implemented in article 73 of the draft law", was stated in the explanation of the amendment on increasing the amount of fines prepared by the Ministry of Finance.
EUR 40.000 is the proposed maximum penalty for banks and credit intermediaries if it is determined that they have violated the rights of credit consumers. The new amount of fines for responsible persons increased from 12 to XNUMX thousand
It was concluded that the amounts of fines in Article 74 of the Draft Law do not represent "a sufficiently deterrent sanction to creditors and credit intermediaries in the event that they violate the rights of consumers for which misdemeanor penalties are prescribed in this article of the law, especially for violating the provisions on the maximum allowed effective interest rates on consumer loans, which does not achieve the purpose of misdemeanor sanctions.
"The proposed changes would contribute to more efficient enforcement of the law and better protection of consumers, as higher fines would represent a sufficiently disincentive sanction for offenses prescribed in Article 74 of the Draft Law," the explanation stated.
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