Banking today and tomorrow | An overview of the banking sector | January 2023

11 January 2023 | Banking today and tomorrow, Knowledge, News

Bill to amend certain acts in connection with the prevention of identity theft

The bill to amend certain acts in connection with the prevention of identity theft has been published on the Government Legislation Centre website and is expected to be adopted by the Council of Ministers in Q1 2023.

The bill is intended to strengthen protection against abuse resulting from the theft of personal data and primarily provides for limiting the scale of illegally assuming financial and property obligations.

In a situation where a PESEL number comes into unauthorised possession (e.g. through physical theft of documents, data leakage on websites, etc.), this information can be used together with a person’s name (or data related to an issued identity document) to e.g. conclude credit and loan agreements, open settlement accounts, sell real estate without an owner’s consent or set up a fictitious business using the data.

Source: The Polish Bank Association (ZBP)

WIRON to replace WIBOR. Credit holders will not pay smaller instalments

For all WIBOR-based credit holders, this will be an important day. The Minister of Finance will issue a regulation ordering a WIBOR-to-WIRON conversion.

The conversion will take place by operation of law on a date set by the Minister. “The WIBOR-to-WIRON conversion will take place automatically, by operation of law, there will be a date set, a corrective spread,” said Tadeusz Białek, Vice-President, at a recent conference of the Polish Bank Association.

Source: Interia

Polish economy doing better than expected. But deceleration will still be strong

The published November data on the real economy turned out to be better than expected. In some cases, there was even an improvement compared to October. However, a downturn is in effect, and although it is fortunately not rapid, which is a good prognosis, this does not change the fact that the scale of slowdown in 2023 will be felt.

Source: Business Insider

Government to subsidise housing credits

The government has announced a new scheme to ease access to mortgages, which  is due to start from July, but it will not improve the creditworthiness of all those who cannot afford any credit today. Apartments themselves may become a little cheaper, or at least that is what PKO BP economists think.

Source: Business Insider

CEO of Bank Pekao S.A.: CJEU ruling on foreign currency mortgages, if unfavourable to banks, would pose a threat to the entire economy

According to Leszek Skiba, the key issues affecting the banking sector in 2023 will include:

  • the CJEU ruling on foreign currency mortgages;
  • the challenges posed by the economic slowdown and high inflation;
  • the general geopolitical situation.

CHF credits are the most important issue that could very much affect the functioning of not only the banking sector but also the economy as a whole. The expected CJEU ruling, preceded by the Advocate General’s opinion, may be unfavourable for the banking sector, which will result in potential losses for some banks being very large. The FSA estimates that the losses for the entire sector may reach up to PLN 100 billion. CHF credit provisions, however, currently amount to around PLN 40 billion,” said Leszek Skiba to PAP Biznes.


Revolutionary court ruling on WIBOR and a sudden twist in the tale

In early November, the Regional Court in Katowice rendered a landmark ruling in a PLN credit case, finding that the bank was not entitled to calculate the interest rate by using WIBOR. As a result, the instalment amount could be reduced from nearly PLN 6 700 to ca. PLN 1 700.

Now, however, there is a major twist, since it turns out that, following an appeal filed by the bank in the case, the Regional Court, by virtue of the decision of 22 December 2022, revoked the injunction granted in early November, as reported by the Polish Bank Association.

The court changed the appealed order, dismissing the claimants’ motion for injunction, meaning that the injunction order does not exist in legal transactions and has no effect,” reads the communication.

Source: Business Insider

Appeal against SARON rejected – the CJEU’s final and non-appealable ruling

In late November 2022, the Court of Justice of the European Union in Luxembourg, in case ref. C-236/22, dismissed by order – as manifestly inadmissible – Beata Sołowicz’s appeal against the order of the General Court of the EU at first instance concerning the appeal against Commission Implementing Regulation (EU) 2021/1847 of 14 October 2021 on the designation of a statutory replacement for certain settings of CHF LIBOR (OJ 2021, L 374, p. 1).

The Court found that the appeal was limited to merely stating that the appealed order was “erroneous” and that the General Court failed to rule on the pleas raised in the appeal, but failed to provide any facts to demonstrate that the General Court erred in law or misrepresented the evidence submitted. Consequently, in the Court’s view, the arguments put forward in the appeal were too “general and vague for the Court to rule on the appeal.”

In view of the above, the Court decided to dismiss the appeal as manifestly inadmissible on the basis of Article 181 of the Rules of Procedure of the Court, which provides that where the appeal is, in whole or in part, manifestly inadmissible or manifestly unfounded, the Court may at any time, acting on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decide by reasoned order to dismiss that appeal in whole or in part.

This order is non-appealable and closes the possibility of challenging the above regulation, removing the legal risk of the possibility of the CJEU annulling the said implementing regulation by way of a direct action under Article 263 of the Treaty on the Functioning of the European Union.

Source: The Polish Bank Association (ZBP)

Will mortgage availability increase? The PFSA is working on changes

A series of interest rate rises and the PFSA’s recommendation, which instructed banks to add 5% to the applicable rate when calculating customers’ creditworthiness, resulted in many Poles losing access to mortgages. The situation may soon change, however, as the PFSA is working on a modification to Recommendation S and less restrictive creditworthiness assessment conditions.

This amendment would only apply to credits based on a fixed or periodically fixed interest rate, i.e. not threatened with an increase in instalments following an increase in interest rates of the National Bank of Poland.

In such cases, the buffer added by the banks to the current rate when assessing creditworthiness would be 2.5%, which is exactly what the PFSA recommended before the start of the NBP rate hike cycle.

According to Jarosław Sadowski, Expander Advisors analyst, a buffer reduction would increase the available credit amount by ca. 18%.

Source: Wprost

Debt collection amid legislative uncertainties

The NPL Directive, aimed at debt market professionalisation, is a priority piece of legislation for the debt collection industry, scheduled for implementation in Poland by 29 December 2023.

It is intended to benefit all stakeholders – debt collection agencies, debtors, banks and their clients.

In order for the NPL Directive to meet the objectives of its authors, i.e. to support the banking sector in the inflow of capital and to take the problem of unserviced loans off the banks’ shoulders, it must, however, be implemented correctly. And the industry is uncertain whether this will happen. All the more so as a debt collection bill authored by Marcin Warchol, Deputy Minister of Justice, has appeared on the horizon.

As Krzysztof Borusowski, CEO of one of the industry leaders, points out, the main element of uncertainty is the shape of the act regulating the activities of debt collection agencies and debt collectors, which is being worked on. The concerns relate to its consistency with the NPL Directive.

Source: Puls Biznesu

Will the bill from the Ministry of Justice harm debtors instead of helping them

 The Polish Bank Association points out that the Ministry of Justice’s bill on debt collection activities and the debt collection profession is harmful to both consumers and creditors. The bankers state, among other things, that “the bill introduces vague legal definitions which, without refinement and further discussion of their shape, as well as without allowing exemptions from this act, will only bring chaos into legal and business transactions.”

According to Polish Bank Association experts, the bill will also indirectly affect banks, laying down on many occasions too far-reaching, radical or redundant solutions and changes, which will result in a significant increase in the banks’ servicing costs which will ultimately be borne by bank customers (contrary to the intentions of the drafters) – either by costs being charged directly to the customers or reflected in the prices and/or margins of new credits. This is due to the banks often selling their receivables or using the services of specialised entities such as debt collection agencies.

In addition, if the bill were to be adopted in its current form, debt collection via debt collection agencies would become extremely inefficient, as creditors would be forced to refer all debt collection cases to the courts, which could also have a real bearing on credit servicing costs.


Tax relief for CHF credit holders extended for another two years

Until the end of 2022, the Regulation of 11 March 2022 on the waiver of income tax collection for certain income (revenue) related to a residential mortgage was in force. Recognising the need for further support for foreign currency credit holders, the Minister of Finance has extended the regulation on tax relief for CHF credit holders, which was to expire at the end of 2022. This means that the PIT and CIT exemption will be upheld in its current form until 31 December 2024.


Term of office to enhance the independence of the President of the Competition and Consumer Protection Office (UOKiK)

The government is to adopt a draft amendment to the Competition and Consumer Protection Act, bringing Polish law into line with the laws of the EU. Among other things, the draft provides for a 5-year term of office for the President of the Competition and Consumer Protection Office, whose earlier dismissal will only be possible in certain cases, as required by an EU directive, which should have already been introduced into Polish law almost two years ago.


Disregard for Polish consumers

 According to Aneta Wiewiórowska-Domagalska writing in Rzeczpospolita, lawmakers should introduce EU rules, adapting their structure and terminology to national laws to enable their effective application.

The public administration authorities, having appropriate (deterrent) sanctions at their disposal, should shape standards in practice.

The courts, on the other hand, acting in individual cases, should bring the situation of specific consumers up to the market standard.

In addition, supreme courts have a special role in national systems structured like the Polish regime.

Due to the complexity of European law (especially in concurrence with national law) and its dynamic development, the Supreme Court should clarify the application of national law in order to ensure the effectiveness of the laws of the EU, establish the content of European law in consultation with the Court of Justice of the European Union and adjust the interpretation of national laws on an ongoing basis in consultation with the lawmakers and the executive authorities.

Source: Rzeczpospolita

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Banking sector legislative overview | Banking today and tomorrow | December 2022

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