Disclose whether banks effective rates
Posted on Nov 1, 2000 08:15:27 AM
Law on potrebkredite not oblige banks to disclose the effective rate. Determine what it is, it turned out to developers is too difficult and they require banks to disclose only the total amount and payment schedule.
This week, the Finance Ministry has sent for approval to the ministries and agencies of the final version of the bill on consumer credit, told Vedomosti that the ministry source. The document was prepared over four years. The Government promised in March to make it to the State Duma, told Vedomosti that the deputy chairman of the Banking Committee of the State Duma Pavel Medvedev, but this did not happen.
Bankers to avoid a major risk – the bill does not require them to disclose the effective interest rate on the loan. Clearly define it in the bill was too difficult to explain the source in the Ministry of Finance. None of this notion and concept of the bill, approved in late February, the government, “he says. The effective rate is not mentioned in one of the latest versions of the bill, which is available to Vedomosti.
It was one of the ideas they talk of “Vedomosti”, but not home. The main thing – to protect the interests of creditors, and investors in consumer lending, and this, in his opinion, can be realized without disclosing the effective interest rate. He did not rule out a return to this issue in finalizing the bill in the Duma. If a document pass approval to set a 10-day period, it can be submitted to the Duma in early April, says the official.
The bill was first introduced the concept of “consumer credit”. He suggests that banks will be obliged to specify in the contract of all commissions with explanations for what they are charged, and the total amount that eventually will have to pay the borrower. Commission should be listed in the schedule of payments. Take penalties or fees for early repayment will be banned. Moreover, if within 14 days after making the loan a borrower changes his mind and decides not to use them, he will be able to return it as a commodity, paying only ascended in this time of interest. True, the return of large (size not yet determined) of loans the borrower will have to compensate the bank administrative costs associated with its design.
The disappearance of the concept of the bill effective rate was surprised Medvedev. “Only by comparing these rates, consumers will be able to decide [where better to take out a loan],” – he said.
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