Foreign currency loans – Loans maturing within six years would not have to be converted

The conversion of foreign currency loans maturing within six years to six years would be made optional by a Commission amendment proposal adopted by a majority of the Legislative Committee of the National Assembly at its Thursday session.

This option would have been secured by a forint bill only for loans

This option would have been secured by a forint bill only for loans

Originally, this option would have been secured by a forint bill only for loans maturing within one year.
The panel held a detailed debate on both fair banks and forint submissions on Thursday, ahead of Friday’s general debate on the proposals in the House’s plenary session.

Another amendment adopted provides for a more favorable interest rate on post-conversion loans than the original proposal, with a lower limit of 1% for interest rates and a maximum of 4.5% for home loans and 6.5% for non-residential loans.

In the original proposal, the lower limit was one percentage point higher and the upper limit half a percentage point higher.
The committee has amended the Fair Banking proposal so that fixed interest rates can be applied to loans disbursed over three years.

In an unsupported proposal

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The MSZP initiated the conversion of loans at the average monthly exchange rates for April 2010. According to their representative, Bertalan Tóth, loans are being converted into forint at the current exchange rate due to a bargain between the government and banks.

Róbert Répássy, Parliamentary State Secretary of the Ministry of Justice, said before the panel that the conversion of forint by the fictitious exchange rate initiated by the opposition parties was impossible for several reasons.

As the Mansion did not classify exchange rate risk

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As one of the terms of invalidity of the contracts, a rate favorable to the creditors would bring hundreds of thousands to litigation in which they would be immune to banks.
On the suggestion of András Schiffer (LMP) that the central bank pass on foreign currency to banks at a favorable exchange rate, thereby easing the burden on creditors, the Secretary of State responded: The European Central Bank prohibits central banks from it also violates the EU’s unlawful state aid rule (MTI).

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