After a meeting of the parliamentary groups, where a draft law on fair banking was discussed, Rogán said banks would have to announce any changes to contracts 90 days in advance.

Banks would also have to provide an “objective indicator”, a formula which they use when changing the interest rate, and this would have to be approved by the central bank, he said.

Other fees could only change at a rate not exceeding the rate of inflation. Interest for late payments would also be capped and borrowers would be allowed to cancel their loans, free of charge, every three years, Rogán said.

The new stricter rules would apply to all loan contracts by January 1, 2016 at the latest, he said. Foreign currency-denominated loans would be phased out from the market and “no forex loan can remain in Hungary after Jan. 1. 2016,” he said, adding that the only exception is if the client, after being offered the conversion, assumes the risks voluntarily.

Rogán said he expected interest rates would drop in general as a result of the introduction of the “fair banking law”.

Source www.hungarymatters.hu

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