New bills aim to boost consumers’ banking rights

MPs on Tuesday said they hoped to soon bring to the plenum legislation beefing up the rights of consumers, particularly in relation to banking services.

Lawmakers have tabled two bills amending the Consumer Protection Law with a focus on what MPs call unfair terms of contract.

Chair of the House commerce committee Kyriacos Hadjiyiannis spoke of many pending issues – including legal issues needing the input of the attorney-general – before the final draft is agreed on.

Despite this, he estimated the amendment could go to the House plenum before Easter.

“We still have a long way ahead of us, but what’s important is that we’ve received the OK from the involved agencies – the Central Bank, the finance ministry and others – to reformulate the text,” Hadjiyiannis told reporters after the committee session.

“We’ll exhaust all possibilities, so that we can create a safety net for the rights of consumers vis a vis the banking sector, to avert phenomena of the past which led to exploitation of members of the public.”

The proposals aim to strengthen consumers’ position when entering into a contract with lenders.

Hadjiyiannis said the two amending bills under discussion would extend the scope of consumer protection, from individuals to include very small businesses (VSBs). They would also allow legal entities to open up a payment account with basic features – something which only individuals can currently do.

A payment account with basic features is a basic bank account for personal use, offering a set of basic banking products and services, free of charge or for a reasonable cost.

Greens MP Stavros Papadouris said, however, that lawmakers have agreed to drop one of their earlier tweaks – namely expanding the definition of ‘consumer’ so that it applied to legal entities as well as to individuals.

Despite this, they would seek through other means to afford similar protections to small businesses.

The collapse of SVB and Signature Bank in the United States, Papadouris said, serves as a reminder that consumers need all the protection they can get.

“We also worry that, in addition to the coming rising interest rates per the European Central Bank’s decision, there exists an unstable environment, especially in relation to investors and investments in the banking sector.

“The economies that will survive, will be those economies who acknowledged the sins of the past and have taken timely corrective action so that they can withstand the adverse environment, which will become even more adverse in the months to come.”