THE COURT OF JUSTICE OF THE EUROPEAN UNION: The banks' customers are the ones who are right, not the NBR and the IMF

• The ordinance which caps fees would have been applicable to ongoing loans as well, according to the Court of Justice of the European Union

• Gheorghe Piperea: "The government should correct the law"

The representatives of the Court of Justice of the European Union yesterday ruled that the Emergency Government Ordinance no. 50/2010 concerning retail lending could have been applied to ongoing loans as well, not just to future ones, like it was stipulated in the law which was passed in its final form by the Chamber of Deputies, at the end of 2010.

Among other things, the law in question stipulated the elimination of certain fees and commissions and proposed the calculation of the variable interest based on the publicly available reference rates of Robor, Libor, Euribor, meaning that banks would no longer be able to set the interest rate in an arbitrary manner.

Back then, in spite of the efforts of the National Authority for Consumer Protection, which wanted to implement the provisions of the Government Ordinance for ongoing loans as well, the members of the Parliament voted against it.

It was the PDL which lobbied in favor of the Emergency Government Ordinance 50/2010 not applying to ongoing loans, causing severe criticism from the PSD and the PNL.

Had the Emergency Government Ordinance 50/2010 applied to ongoing loans, the banking system would have lost 600 million Euros.

At the time, the International Monetary Fund demanded, as a precondition for the release of the tranches of the stand-by loan, that the ordinance "should not apply to ongoing loans".

The information from the Court of Justice of the European Union, that the Emergency Government Ordinance 50/2010 could have also applied to the loan inventory, occurred after it was queried by the Court of the County of Călăraşi, in a litigation between the National Consumer Protection Agency and Volksbank, which resulted in the bank being fined.

Even though the Emergency Government Ordinance 50/2010 prohibits the levying of the risk commission, which has now become illegal, Volksbank continued to charge it every month, to the tune of 0.2% of the balance of the loan.

Volksbank argued before the European court, that the Romanian regulation, which prohibits the charging of certain fees, reduces the possibility of Romanian customers accessing consumer loans in other EU member states, which apply less strict regulations, and therefore violates the norms concerning the free provision of services.

The Court of Justice of the European Union ruled that the Directive 008/48/CE of the European Parliament concerning consumer loans, which the member states had to join, does not restrict a country from imposing upon lenders obligations which are not stipulated in the Directive, when it comes to the types of fees.

• Gheorghe Piperea: In 2010, even Mugur Isărescu said that the

Emergency Government Ordinance could not be applied retroactively

The Romanian lawmakers may propose a law which would set things in order, when it comes to the Emergency Government Ordinance 50/2010, or the government may even issue an Emergency Ordinance in that regard, meaning that the law in question would apply to ongoing loans as well, said lawyer Gheorghe Piperea.

This thing should happen, especially since in 2010, the PSD and the PDL were only in favor of the law being applied to new loans, the lawyer also says:

"We have seen some serious lobbying in 2010, when 3-4 banks were terrified at the idea of the Emergency Government Ordinance 50/2010.

At the time, even Mugur Isărescu said that the Emergency Government Ordinance could not be applied retroactively".

Gheorghe Piperea says that the legislation of the European Union when it comes to consumer protection requires a minimum of protection for consumers in the EU member states, which may harsher restrictions, beneficial for consumers: "The National legislation is allowed to be more restrictive than the Union law, and, for example, the Government Emergency Ordinance 50/2010 was allowed to stipulate that it could very well apply to ongoing loans, (even though the directive no. 48/2010/CE of the European Parliament prohibited its retroactive application), without violating Union law, quite the opposite. I was not the one to come up with the idea, it stems from the previous jurisprudence of the Court of Justice of the European Union".