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Cyprus

Group calls for protection of borrowers as finance minister meets with bank association

foreclosures, foreclosure law

The ‘Movement Against Foreclosures’ on Tuesday expressed its disappointment at the outcome of the House finance committee the previous day, requesting the protection of borrowers within a specific framework.

Deputies were discussing the issue of home repossessions, with MPs from various parties drafting 19 bills, some of which were eventually withdrawn by the MPs themselves.

Of the 19 proposals, the finance ministry was willing to consider only two.

In a statement, the group said that during the committee session, which its members attended but were not allowed to speak, a finance ministry representative did not give any leeway for the protection of borrowers, not even the provision of legal means of access to justice, as mandated by the European Union.

“We expect the voice of society and the groups of borrowers who are at risk of ending up on the streets without access to justice, to be heard,” the statement said, insisting that there should be some protective measures for borrowers within a specific framework.

The movement added that it nevertheless agreed with the legislative proposals aiming to provide temporary legal measures to protect borrowers while suspending property auctions pending adjudication of the dispute between the borrower and the bank or credit acquiring company.

Meanwhile, the association of Cyprus banks released its own statement after a meeting with Finance Minister Makis Keravnos on Tuesday afternoon.

“Credit institutions are well aware of the effects the current economic conditions are having on households, and in this context, attended the meeting in a constructive mood,” the statement said.

The statement added that members of the association are sensitive to the situation and are already offering restructuring plans and solutions to people facing financial difficulties, in line with European regulations.

“Following the meeting with the finance minister, each institution will examine additional solutions to relieve households,” the association added, clarifying that it does not have the authority to handle matters concerning the establishment of the interest rate policy affecting its members.

While attending the employers and industrialists federation’s annual general assembly, Keravnos told reporters that “useful views” were exchanged during the meeting, adding that he expects developments “that will be helpful for society and the economy.”

Asked whether these developments are expected soon or in the long term, the minister replied that “long term is a loose concept.”

He added: “Developments are underway, and more is expected soon.”

On the association’s reaction to the letters he had sent proposing lenders absorb some losses so as to not raise their interest rates, Keravnos said representatives “studied my letter very closely,” and that he saw “a willingness to understand and cooperate.”

Debate on the matter has resumed because last month parliament voted against extending a freeze on home repossessions – effectively allowing banks to resume the practice.

Some MPs at the time warned of a coming ‘tsunami’ in home repos if borrowers were left unshielded.

 

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