10 May 2008
The prime minister presented in Parliament yesterday a series of measures
for the protection of people who take out loans that is soon to become
law, while also sending a warning to banks.
Speaking during the prime minister’s question time, Costas Karamanlis
announced that the government is studying various regulations to protect
consumers when they borrow from banks. This development comes in view
of the excessive number of repossessions and house auctions seen in
the last few years owing to indebtedness from loans.
The measures considered include the banning of auctions of properties
at prices below their officially determined value (objective value),
the compulsory holding of auctions only in magistrate courts with sealed
bids, a grace period up to one year for borrowers before a property
is seized, a set of social and economic criteria used for the handling
of each borrower, a ban on seizing monthly salaries up to 1,500 euros,
and the possible increase of the 10,000-euro threshold in debts, below
which a borrower’s sole house cannot be auctioned.
Therefore, the government is adopting most of the opposition’s proposals,
which PASOK leader George Papandreou greeted with satisfaction.
“There are thousands of families who lose their houses,” he said, asking
for more measures.
Karamanlis also warned banks that their behavior toward their clients
is being carefully watched: “We recognize their contribution to the
country’s development, but they need to show increased social responsibility.
We will not tolerate practices which contravene good faith or transaction
terms which are abusive.”
He then referred to debt-collecting firms, saying that this is an issue
brought to light by the Consumer Ombudsman and that the competent ministries “are
working together to produce an institutional framework that will set
some rules in this particular industry.”