Proposition 50K1123

Projet de loi relatif à la Centrale des Crédits aux Particuliers.

General information ¶

Submitted by

Groen Open Vld Vooruit PS | SP Ecolo MR Verhofstadt Ⅰ

Submission date

Feb. 27, 2001

Official page

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Status

Adopted

Requirement

Simple

Subjects

consumer protection consumer credit credit indebtedness

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP Open Vld MR

Voted to reject

FN VB

Abstained from voting

N-VA

Party dissidents ¶

• Alfons Borginon (Open Vld) abstained from voting.
• Pieter De Crem (CD&V) abstained from voting.
• Els Van Weert (Vooruit) abstained from voting.

Contact form ¶

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Discussion ¶

May 23, 2001 | Plenary session (Chamber of representatives)

Full source

Mr. Speaker, Mr. Ministers, colleagues, the bill that was discussed by the Committee on Business in four meetings, aims to establish in our country a positive credit central. The draft fits into the government’s struggle against the problem of debt loss that many families in our country face. It implements one of the recommendations of the Interministerial Conference of 26 April 2000. The basic philosophy is the establishment of an efficient system of prevention of excessive debt burden.

In 1985, the National Bank of Belgium established a consumer credit centre. This credit centre is currently recording late payment in consumer credit and mortgage credit. The registration of defaults is important in order to enable an assessment of the consumer’s financial situation. Indeed, the creditor and the credit intermediary have the duty of due diligence with regard to the offering and mediation of credit agreements. The law, by the way, requires a prior consultation of that central database.

The draft law transforms the negative database into a positive database. This means that not only the defaults but also the ongoing credits are registered. Once the law has entered into force, all consumer credit agreements and mortgage credit agreements will be registered with the National Bank of Belgium. For this purpose, creditors will be required to provide the necessary information.

The draft also includes a number of provisions for the protection of privacy. Of course, the recorded data may only be communicated to a limited number of persons. Furthermore, the information provided should only be used in the context of the granting or management of credit or payment means. Use for commercial purposes is expressly excluded. The persons who obtained information from the central should take the necessary measures to ensure the confidentiality of the information.

The registration must be mentioned in the credit agreement. When a default is registered, the National Bank shall notify the borrower without delay. In addition, each borrower has free access to the data registered on his name. He can freely and free of charge request the correction of incorrect data.

Before concluding a consumer credit agreement or handing over a mortgage credit agreement, creditors should consult the positive credit central. A proposal to tighten the scheme and exclude any new credit agreement where the borrower is registered as a default is not adopted. This would prevent persons whose financial condition has been restored but has not yet been registered from obtaining a new credit.

On the other hand, a proposal was adopted to allow the National Bank to request information from the file of messages of seizure, delegation, transfer and collective debt settlement. At the proposal of the Minister, this consultation remains optional.

An amendment was also adopted allowing the National Bank to consult other records relating to unpaid consumer debts.

Such consultation is subject to the authorization of the King and subject to the conditions determined by the latter. The bill also provides for the establishment of a supervisory committee at the National Bank. Its tasks consist mainly of adding opinions to draft implementing decisions and decisions relating to the organization of the plant. During the discussion of the bill in the committee, several members submitted amendments to articles that had already been approved. They were no longer discussed and were therefore referred to the plenary session.

Mr. Speaker, Mr. Ministers, colleagues, the report of Mrs. De Meyer very well reflects the path that this bill has taken in the committee. I would like to make a few comments about this, because I am certain that this Positive Credit Central will in fact have a negative effect.

The government parties and the minister believe that the Positive Credit Central will be able to play an important role in the fight against debt overload. They believe that the provisions of the draft will for the time being be effective in preventing the debt burden arising from the accumulation of credit agreements. The main line of the draft involves the creation of a positive file that records all credit agreements. Before a new loan is granted, lenders should consult this file. The Government insists that this will make it easier for the court to invoke the liability of the creditors.

I admit that the draft has praiseworthy objectives, but furthermore it is clear that in its current form it will not contribute to reducing some of the profound and dramatic consequences of debt burden.

Colleagues, both our group and a number of consumer groups have been looking forward to this design with legitimate expectations. After years of waiting, the government would take an important initiative to counter the “credit tree”. Unfortunately, we must conclude that nothing is less true, because the concrete fulfillment of the Positive Credit Central is too limited for that. The draft is not sufficiently comprehensive in terms of accountability of creditors, nor is it sufficiently comprehensive in terms of the protection of careless creditors.

It was precisely in order to remedy a number of major shortcomings that we submitted a number of amendments in order to impose more obligations on creditors. We also propose sanctions that could make achieving the objectives of the positive credit central system more compelling. Therefore, I noticed during the discussion in the committee that most colleagues ignored the fact that the proposals of the government do not contain sufficient enforceability.

Mr. Speaker, if you allow me to do so, I am already applying the amendments, as this fits within the overall vision of this draft. For now, I hope that I can make it clear to you now in this meeting that some interventions in the present draft would make a world of difference in counteracting the debt overload.

A key point for us is very clear that Article 9, which includes the consultation of creditors at the central, must be supplemented with a more compelling supplement. In our view, creditors should be prohibited from presenting a new credit agreement to the prospective borrower if the prospective borrower is already registered as a non-payer and if the conclusion of a new credit agreement would put the borrower in a situation of debt loss. If this amendment is rejected, the lender can still grant unpunished loans to a prospective borrower whom he knows is in a situation of debt default or threatens to get into justice. Nothing prevents him from granting credit. It is then spoken of the judicial procedure in which it was provided, but a judicial procedure afterwards is clearly not a preventive measure! What is the liability of the creditor if he is not obliged to make effective use of the information obtained in his decision? What prevents the legislator from making this obligation tougher? Making this compulsory would only lead to an effective means of combating debt degradation. Their

Indebtedness must, by the way, be demonstrated by a resource study carried out by the creditor with each application. This is clearly the core point of our criticism which is very clearly shared by the Association of Flemish Cities and Municipalities. We would therefore find it incomprehensible that a central credit institution for credit to individuals is established if only instructions are communicated to the creditor without enforcement measures. The preventive nature of such a stock may not work sufficiently. There are a number of implications associated with the direction we take with this argument; some of these are supplemented by some smaller amendments. The resource examination of a debt default situation may serve as evidence to demonstrate whether a credit agreement examining the fixed liabilities and the credit obtained may have been granted. Their

When our amendment to Article 4 is approved, the investigation may be used by the competent officials in their action against alleged infringements by creditors.

To make the processing of information on the financial condition and the solvency of the borrower more compelling, we believe appropriate sanctions should be accompanied. In this sense, a paragraph 1a should be added to Article 15, as it is appropriate to provide for the essential part of the bill a heavier fine as a sanction than for a number of other obligations contained in the bill. In this way, the regulations could be better enforced.

In addition, we also find it appropriate to address the non-compliance with the proposed Article 9bis with the possibility for the judge to act on its own. This possibility could relieve the borrower of the other payment obligations in addition to the negligence interest, precisely in violation of the new Article 9bis.

Finally, Mr. Speaker, we submitted some amendments concerning the monitoring committee established by Article 13. Again, it surprises us that most members would consider the presence of representatives of both the consumer associations and the associations of cities and municipalities, as not valuable. They are, however, closely involved in the debt problem, and in addition, according to our proposal, they would be granted only an advisory power.

The present draft law should truly be a boost in the fight against the increasing debt burden that unfortunately affects more and more individuals and families. However, I repeat that the proposal threatens to become a measure for nothing if the majority parties do not want to understand that the law must provide for a more compulsory character.

We are therefore surprised that the possibility of effectively obliging the lender to refrain from granting loans is not taken into account if it turns out that this would be inappropriate according to the data from the central. Creditors will not feel invited to take preventive measures. The present proposal gives the judge too much room for interpretation when applying the law.

Mr. Speaker, we have come to the conclusion that the positive credit central is not at all positive. The negative aspect of the proposal clearly lies in the faulty enforcement of the obligation to no longer provide loans in the cases as I have just mentioned. During this meeting, Parliament has the opportunity to correct a number of weaknesses.

With regard to the members who were not present at the committee meeting, I would like to know how this bill was dealt with in the committee. It is by no means a good example of sound and thoughtful legislative work. First, the quality and completion of the functioning of the credit central clearly depends on the accidental presence or absence of the committee members of the various political groups.

We have tried this by improving the amendments somewhat. Other colleagues also submitted amendments after the vote of several articles, but the majority did not want to reopen the discussion. This design is a clear missed opportunity. Nevertheless, it could be seen as an act of good governance and protection of the non-solvable consumer if the various factions still follow our suggestions today. That is why I have re-submitted the most important amendments, because only in this way can the positive credit central be truly worthy of its name. Otherwise, it is a pro forma cloth for bleeding.

We welcome the establishment of a positive credit centre. But we want to draw your attention to the fact that the fight against over indebtedness is a much more complex and difficult battle. It cannot be solved by a single tool, even if it is called “central loans to individuals”. by

We live in a society called “consumption.” Advertising is an integral part of our daily life. The rise in living standards for a segment of the population is combined with the emergence of luxury products that are now banalized. Selling through credit is banalized, or even encouraged. For those who don’t have the chance to have sufficient income, we often witness a confusion between being and having. by

The number of overindebted people continues to increase. Among these, the number of those who have to honour more than three credits is also increasing. This phenomenon of over indebtedness does not only affect people with low incomes, although the consequences for them are of course even more dramatic.

I would therefore like to reset the fight against over indebtedness in a more general context, recalling that it requires multiple measures, such as improving the quality of life of the most deprived, including by linking welfare benefits and raising the lowest wages, taking into account social and educational support beyond jobs or benefits. The fight against over indebtedness is also about promoting job stability and continuing education; it is also about regulating free competition and the market, thus advertising and banking agencies. by

The creation of a credit centre therefore requires financial institutions to inform themselves about the number and amount of existing credits, as well as the seizures made, when a person applies for a new credit, even if the person regularly pays off their credits. So it is about avoiding excess credit that will drive the person on the slope of over indebtedness. by

It is true that the bill does not provide for the prohibition to grant a loan after obtaining this information. We had some discussions on this. Currently, because the necessary tools do not yet exist, it is indeed important to allow people, even in difficult situations, to be able to buy basic necessities by using credit, since they have no other option. For some people, it is impossible to withdraw the money needed to buy a necessity.

On the other hand, I think it is necessary to motivate and stimulate regions to provide for the establishment of social lending services that would allow these people to benefit from interest-free loans to meet those needs. Furthermore, stronger measures can be taken under this law.

The bill provides that the court will be able to exempt the person from repayment of interest on the loan that would have been granted to him without considering his or her repayment capacity. Some would have wanted the exemption from the refund of capital to also be included. We believe that such measures should be incorporated into the ongoing revision of the Consumer Credit Act, which should in general strengthen the accountability of credit institutions. A positive central should not replace the entire Consumer Credit Act.

Certainly, we were questioned by the Union of Cities and Municipalities, which wanted to see gas, electricity or rent debts included in the data to be taken into account to estimate whether a person was able or not to take on a new loan.

In this regard, I would like to draw your attention to the fact that this central credit should not be transformed into a tool for standardization and social control. There are other measures to be taken in this regard, which include improving the capacity of social assistance services to support those in need in a more comprehensive way and improving the collaboration between energy, water and housing companies to prevent situations of exclusion. Again, let’s doubt, a central credit cannot and must not address all social gaps.

Finally, the composition of the accompanying committee, which will surround the establishment and operation of this central credit, is relatively broad in its title. Personally, I’m in favour of these global terms of “lender”, “lender”, “bank”, “privacy commission” and “minister of economy”. Indeed, many actors work on the ground, in addition to the CPAS who intervene in knowledge of the matter. In my view, it is important to allow the King, depending on the existing field players, to adjust this composition.

We will therefore vote on this bill by paying attention to the evaluation. I think it is necessary to make an appointment at the time when this accompanying committee is to submit its annual report in order to assess the relevance and effectiveness of the measures taken and to consider whether changes should be made.

This project was apparently the result of long and ⁇ painful negotiations with the banking sector that had to become a partner in this approach. We want to highlight this positive side and hope that the implementation of this bill will allow us to verify whether this sector is properly assuming its responsibilities as a true partner. Only then will it be appropriate to introduce more coercive measures in the event of non-compliance with the objectives of this project.

Mr. Speaker, Mr. Minister, colleagues, the registration of all credits is a classic requirement of consumer organisations. The reason is that in some cases credits are granted that exceed the borrower’s repayment capacity. Today, there is already a central registering of all defaults under the Consumer Credit Act and the Mortgage Credit Act. This is called a negative power plant. This design creates the legal basis for a registration of all credits. The central bank for loans to individuals, which currently falls under the National Bank of Belgium, will be expanded for this purpose. Thus, the proposed draft aims to combat the excessive debt burden of families through a preventive mechanism.

How will this mechanism work?

Before concluding a new agreement, creditors will have to consult the central authority, which will provide them with information on the possible existence of other agreements concluded by the potential borrower. Thus, the lender will be able to obtain information about any defaults. What they should start with this information is not determined by the design. The creditors are free in consequence of giving to the available information. This is, of course, one of the weak points of the project.

The CVP will support this draft because we support the intention — to limit and prevent consumer credit problems resulting from overcrediting. Even here it is better to prevent than to cure.

We have a few comments on the effectiveness of the present draft. This efficiency is, in our opinion, compromised in three different ways.

First, the registration of all credits is to shoot with a cannon on a mosquito. After all, there are very many credits registered that will never go wrong with anything. Thanks to the current information technology, a registration of all credits is fortunately technically feasible, but hopefully it is also economically feasible.

Families have other debts than credit debts. We think of rental, tax and energy debts and debts resulting from the use of GSM. This type of debt remains out of sight in this draft. This is by no means justified. In the overall package of debt problem, these debts do not occupy an insignificant place. The fact that this type of debt is not included in the design weakens its effectiveness. Their

The actual efficiency of the positive risk centre, which should be expressed in preventing financial difficulties resulting from overcrediting and excessive debt burden, is closely linked to the demand for the liability of the creditor. The question is to what extent this design affects their liability. Although this draft requires the creditor to consult the risk centre, the draft does not bind any consequences to the consultation. The consequences that the lender gives to the consultant remain entirely his responsibility. Nothing can stop the lender from granting a sixth or seventh loan.

The basic criticism of the VVSG is that this draft requires a greater resource investment but that it is not certain that there can also be expected any concrete impact of this effort on the reduction of the number of persons with payment problems. In the committee, the CVP expressed this concern. The present draft creates an instrument to combat excessive debt burden. Whether this tool will ⁇ its goal is far from clear.

I repeat that the CVP will approve the design. However, we urge good monitoring and now ask to evaluate the application of the law next year in order to be able to update it if necessary.

Mr. Speaker, I will not return to the importance of this project, which I am intimately convinced of its usefulness as a means of combating over-indebtedness. A few years ago, the idea of installing a positive power plant had sparked a heated debate and no majority had come out to move in this direction. Is it because we see more and more that over-indebtedness has become a widespread social problem that a majority finally emerges to advance the idea of a positive central?

This is, therefore, a social problem that I will not return to, since everything has been said, especially in commission, about this phenomenon. However, I would add that we can imagine going even further.

I understand Mrs Brepoels’s objections, in which she wishes to impose more obligations. However, I believe that the measures proposed today are sufficient, provided – and I share Mrs. Creyf’s opinion – that we guarantee the application of the law. It is therefore undisputed that an evaluation will be indispensable to verify whether the objective of the law is achieved. The establishment of the Central for Loans to Private Persons will enable the fight against debt overload to be conducted more coherently, while at the same time ⁇ ining the dynamic that comes from the credit. We do not want to play one against the other. As regards the development of the draft and its implementing decisions, I would like to emphasize that the banking sector has worked very loyally. Also in the field of protection of private life, it was necessary to ensure that the design provided sufficient safeguards. I was very pleased when the Privacy Protection Committee approved this draft. Their

I think therefore, ladies and gentlemen, that it is true that we can always imagine going further but the fact of creating thus a capacity for the judge to assess the irresponsibility of the lender is important and should lead the lender to more caution and prudence.

It makes no use to go further by saying that as soon as a person has a lot of credits, and not just failing credits, he can no longer borrow. Because credit dynamics are an important component of consumption. In addition, the situation of people can evolve. Thus a person can very well see his situation improving and if a measure imposed a ban on lending when credits accumulate, there would be a time gap between this decision and the evolution of the person’s personal situation. Therefore, it is good to act with caution and to consider that any more coercive measure would be likely to turn against those who, under responsible circumstances, seek credits.

I agree with Ms. Gerkens on prevention: it is clear that everything we can invent in terms of legal arrangements should not make us forget that the primary goal is to make the consumer aware of the risks they are taking and, more generally, to make people more aware that certain credits for relatively subsidiary purchases cannot bring happiness — you will be surprised that it is the Minister of Economy who says it!

This is how I will end with a philosophical connotation my thanks to those who participated in the work of the committee and were very positive in their interventions.

General discussion is closed. The general discussion is closed.