Government Emergency Ordinance 50  ANPC: Going to court - the only recourse for customers unhappy with the addendums to their loan contracts

• Samuel Calotă: "Contracts concluded after January 2nd, 2011 are considered new"

• The new provisions apply to customers that have already signed the addendums

The ordinance concerning the loans of the population (Emergency Government Ordinance 50/2010) continues to be a source of headaches for banks and their customers alike.

After the changes brought about by the law No. 288/2010, passed in December 2010, stating that the provisions of the ordinance only apply to new loans, the question arises what exactly constitutes a "new" loan agreement (those concluded after June 21st, when the emergency ordinance 50/2010 came into effect, or those signed after January 2nd, when the law amending the Emergency Government Ordinance 50/2010, three days after its publication in the Official Gazette)?

Samuel Calotă, the vice-president of the Romanian National Authority for Consumer Protection (ANPC), explained that only loan agreements signed after January 2nd, 2011, can be considered new and are governed by the provisions of the Emergency Ordinance 50/2010, revised and amended by the Law no. 28850/2010.

Thus, contracts signed between June 21st and January 2nd, 2011, will also be considered ongoing, not only those signed before June 21st (when the Emergency Ordinance 50/2010 came into effect).

As a result, borrowers that have already signed the contract addendums, will see those provisions apply to them as well, even though their loan contracts can be considered as ongoing. For them, there is no going back to the situation they were in before they signed the additional agreements.

The officials of the National Consumer Protection Agency have explained to us that the only solution for those that are unhappy with the provisions of the additional agreements is to go to court, in order to have the abusive clauses imposed by the banks before the passing of the Government Ordinance 50/2010, be declared null and void, which were later reinforced by the fact that the borrowers accepted to sign the additional agreements.

For instance, if the initial loan agreement establishes that the interest rate consists of a fixed margin plus Euribor, and the bank later raised the interest rate while the Euribor rate remained unchanged, the customer can sue the bank.

Samuel Calotă said: "The provisions of the Emergency Ordinance will apply to contracts which were ongoing on June 21st, 2010 when the emergency ordinance 50/2010 was passed, if the additional agreements were signed by both parties (ed. note: for the purpose of complying with the provisions of the Ordinance. The ordinance will not apply to loans for which the borrower or the bank did not sign the additional agreements and the borrower or the bank notified the other party that they do not want accept the implementation of the provisions of the Ordinance."

Customers that did not sign the additional agreements that they were sent by the banks (implied consent) have 60 days from the coming into effect of the new law (January 2nd, 2011) to challenge the additional agreements and to return to the terms of the initial loan agreement, explained Samuel Calotă.

• Gheorghe Piperea: Banks will pressure customers, who will need to decide whether they want the provisions of the Emergency Government Ordinance to apply to their loans or not

Very few customers signed the additional agreements of their own will, as most of them showed no interest in the problem, (implied consent), said Gheorghe Piperea, coordinating partner of the law firm "Piperea şi Asociaţii".

He said: "Even though according to the provisions of Government Ordinance 50/2010 implied consent was only valid if the additional agreements fairly implemented the provisions of the consumer protection legislation, this was a mechanism that I consider as extra-legal - which banks used to include in the contracts costs equivalent to the costs they were already charging their customers, by including the maximum margins in the interest rate, as well as to further strengthen the abusive clauses of the contracts."

On the other hand, the aforementioned lawyer considers that the banks in question will pressure customers, who will need to decide within 60 days, whether they want the emergency ordinance to apply to them or not.

He added: "If they do sign (ed. note: the additional agreements), then they will be forced to accept the provisions of the Government Emergency Ordinance 50/2010. if they do not, then they will no longer benefit from the effects of consumer protection legislation.

And lawmakers are forcing them to request the application of the Government Emergency Ordinance no. 50/2010. It"s only through this request that the bank can decide whether it wants to apply the Emergency Government Ordinance 50/2010 or not. It is obvious that there will be banks that will refuse to implement these requests. It is the same perverse procedure by which the Boc Government used Government Decree 735/2010 to force military retirees to request the recalculation of their pensions themselves, or else risk having them recalculated by default, based on the average wage - which would have left them with a pension of 400 lei, as opposed to their current pensions of 3,000 lei".

• Gheorghe Piperea: "Strangely enough, this will discriminate against some banks as well"

With the exception of a small number of banks that refused to implement the ordinance concerning individual loans, most of them did comply with its provisions, "some in good faith, and others gritting their teeth", said the representative of "Piperea şi Asociaţii".

Banks that have already borne the costs of implementing the provisions of Government Ordinance 50/2010 will now need to revise all their procedures, to return to their state of things prior to the sending or the notification of the existence of the additional agreements, in September 2010, while the more stubborn banks, "that did not incur these costs because they refused to comply with a law issued by the government of Romania, a country in which they do profitable business", no longer need to draw up all those additional agreements, said Mr. Piperea.