“We have learned from the media that Vice President Calviño is negotiating with the bank employers’ association AEB some aid for mortgage debtors and that they want to approve it in the Council of Ministers this Tuesday.”
This is how he explains Carlos Ballugerapresident of the Council of Consumers and Users (CCU) the current situation in which the Government and banking entities have been unilaterally negotiating said aid since last September without counting on consumer representatives to mitigate the rise in interest rates caused by the European Central Bank, which make mortgages more expensive.
In the code of good banking practices Those who enter less than 24,300 euros are considered vulnerable. But the Government wants to go further and include the middle class with problems to assume the payments, expanding the concept of vulnerable consumer.
Meetings between the Ministry of Economy of Nadia Calviño, and the bank employers’ AEB, with Alejandra Kindelan, third for the fund, have been happening in recent months (Photo: EP)
Apparently both the Government and the banking employers rule out the measure proposed by the second vice president and Minister of Labor, Yolanda Diaz to freeze the conditions of the mortgages.
User associations also warn of the risk of only including vulnerable people. A) Yes, Patricia Suarezpresident of ASUFIN, a minimum agreement because the vulnerable only represent about 200,000 mortgages of the eight million that are signed.
The Bank of Spain calculates that almost 14% of mortgaged families will have a high financial burden due to the rise in rates.
“The minister’s attitude borders on enlightened despotism. A series of measures are addressed to improve the situation of vulnerable consumers and mortgage debtors but without counting on them”, agrees Balluguera.
In his opinion, “this is an essential issue in which we should be heard because we have proposals to make, we do not want more term without paying amortization, but paying interest, that is the soft revolving of conventional moratoriumswe want debt restructuring, limitation on the increase in remunerative interest, that is, a ceiling clause for the benefit of consumers and, in the most difficult cases, suspension of payment of the installment without paying remunerative interest during the grace period”, continues this expert ”.
From what has transpired after the latest meetings between AEB and the Ministry of Economy, another mortgage moratorium is being considered and, foreseeably, a reduction in the payment of mortgage installments.
Carlos Ballugera, president of the CCU, believes it is necessary to listen to the proposals of consumers in this negotiation between banks and the Government (Photo: CCU)
It would be, according to Calviño, after a meeting this Friday with the European competition commissioner Vestager, It is not just expanding the Code of Good Practices to which the banks signed up in 2012, but to launch a new code, a kind of ‘code two’, which helps mortgagees who are not so hard-pressed, but who may suffer difficulties in the future.
“The first step would be for the vulnerable people and the second in a broader way for the middle classes of our countrybut they have not asked for the opinion of the CCU or of the representative associations that we are the ones who know the problem best from our contact with consumers”, he clarifies Ballugera
For the middle class, what is being negotiated with the banks is some formula aimed at flatten the fee paid for mortgages by extending the repayment terms.
Regarding vulnerable consumers, one of the main measures is to incorporate new grace periods to the 2012 codeto which banks voluntarily subscribe for its mandatory application.
Calviño indicated in an appearance among the media that the Government is “working intensively with financial institutions.” “We hope that in the next few hours we will reach an agreement in order to adopt the measures in the next Council of Ministers,” he said. The negotiations with the banks are taking place in a “constructive” climate, he added.
In fact, the idea of the Executive of Pedro Sanchez is that the new measures of the aforementioned agreement enter into force on January 1, 2023. For that to happen, it is necessary that they be approved in the Council of Ministers on Tuesday or next week, since the chosen formula will be that of the royal decree-law, which must be validated within a month by Congress.
Apparently, on the table is the proposal of the banks that is being debated at the moment, consisting of applying a two-year grace period on loan principal payment as long as the financial burden represents more than 50% of the income of the family unit.
The additional support measures could be activated in the event that the mortgage payment rises by 20%, compared to the 40% previously raised. The life of the loans may also be extended without exceeding 40 years.
Another aspect under discussion is the possible increase in income from which help is activated for the vulnerable.
“The idea of the Executive of Pedro Sanchez is that the new measures of the aforementioned agreement will enter into force on January 1, 2023″ (Photo: EP)
Queja letter to Calvino
This has led Ballugera himself to address a letter to Nadia Calvino showing his surprise at this way of acting.
They demand immediate participation in that dialogue table, something similar to what the Minister of Energy Transition has done, Teresa Ribera, that in view of the measures taken by the Government regarding the energy crisis, it is holding various meetings with the main operators, the voice of the CCU being heard in some of these work meetings.
In said letter, to which he has had access Economist & Juristit is pointed out that the situation already comes with a dangerous precedent such as the extension of the moratoriums in the Covid-19 stage.
The same thing happened with the credit moratoriums in the worst moments of the Covid crisisan issue that is recalled in said letter, stating that: “The exclusive dialogue of your Department led to a lack of extension of the legal moratoriums, despite the insistence of the CCU on that extension, and led to a poor regulation of the conventional moratoriums that prevailed almost exclusively the income of the bank, one of the few privileged economic sectors that, through conventional moratoriums, continued to generate their income as if there were no crisis.
“In the end we found out from the BOE of these measures that have been implemented with little luck,” he highlights.
In fact, in statements to this medium, the president of the CCU recalls that “this scenario produced a powerful increase in profits during 2021 and 2022or that has led the Government to project a tax on bank profits that mitigates this manifest inequality.”
In his opinion, putting the tax on the bank is fine. However, this medium has news that now it does not seem certain that the Government will approve the measure despite the open debate.
“We welcome this measure which, on the other hand, could have been avoided with some moratoria that would have respected the interests of consumers to the same extent as those of banks. We believe that the lack of dialogue with the CCU gave rise to that bad regulation”, it is indicated in that letter.
Ballugera clarifies to this journalist that consumers are the first concerned about the current economic situationspecifically in the cost of mortgages and the obstacles of the banks to change, at the request of the debtors, the variable mortgage for the fixed one.
from the CCU the role of the Government in wanting to help the most vulnerable consumers is valued “But we are concerned that only one party is spoken to, as was done with the moratoriums. This lack of dialogue, as I have already said, is at the root of the problems that we are “reporting,” said letter highlights.
In his opinion, “Government aid is welcome, but it, in a democratic society, necessarily have to have the voice of consumers expressed by themselves and their legitimate representatives”, as indicated in said letter.
From this perspective, this leader recalls that it is up to the Council of Consumers and Users bring the voice of economic interests and social of the consumers up to your Department.
“Consumers want to participate in this dialogue with mortgage creditors, for this reason I ask that the Council be part of this negotiation with the banks and the Government”, clarifies our interlocutor.