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The Verkhovna Rada of Ukraine supported in the third reading and as a whole draft law No. 1558-1 “On the restructuring of obligations on loans in foreign currency.”
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The Verkhovna Rada of Ukraine supported in the third reading and as a whole draft law No. 1558-1 “On the restructuring of obligations on loans in foreign currency.” 229 MPs voted for the corresponding decision, with 226 minimum required.
As noted in the explanatory note, the adoption of this draft law is due to the need to take prompt measures aimed at ensuring financial stability in the state, restoring public trust in banking institutions and the state as a whole, maintaining economic growth and ensuring the protection of citizens’ constitutional rights.
UPD: Some members of the Ukrainian parliament want to withdraw their votes for the law on restructuring foreign currency loans.
Our opinion
- Everyone has written about the law on foreign currency loans. We will say it in “three” words. We view the law negatively — populism and lunacy leading the country to a dollar at 50, or even 100. What astonishes most is the Verkhovna Rada of Ukraine with the possibility to “withdraw votes” — it looks like a marketplace; the deputies do not know what they are voting for.
The law is aimed at protecting the rights and legitimate interests of consumers of financial services, minimizing the negative consequences of the devaluation of the national currency for individuals who are residents of Ukraine and have existing unfulfilled obligations in foreign currency under consumer loan agreements, including mortgages, concluded with banks and other financial institutions operating on the territory of Ukraine, and other persons to whom the rights of claim under such agreements have been assigned, by establishing the procedure and conditions for restructuring obligations under loan agreements in foreign currency into the national currency of Ukraine.
According to the law, creditors, upon the written application of borrowers who have existing unfulfilled (at the time of entry into force of this law) obligations under consumer loans, are obliged to carry out the restructuring of obligations under such consumer loans on the terms and in the manner determined by this law.
Creditors are prohibited from imposing on borrowers any additional obligations to pay any fees, charges, commissions and the like in their favor for carrying out the restructuring of obligations under loan agreements.
For the purposes of restructuring obligations under loan agreements, creditors are prohibited from requiring borrowers to provide any documents other than a written application.
The law defines the procedure for restructuring obligations under consumer loans, according to which “the restructuring of the borrower’s existing obligations under a consumer loan, namely the unpaid loan principal and accrued but unpaid interest (hereinafter – the outstanding balance of the consumer loan), is carried out by changing the currency of performance of the obligations under the consumer loan to the national currency of Ukraine at the official exchange rate of the National Bank of Ukraine on the date of signing the loan agreement.
The restructuring of obligations under a consumer loan is formalized by an agreement that specifies:
- the amount of the obligation in the national currency of Ukraine;
- the interest rate for using the credit funds, which may not exceed the interest rate established by the original foreign-currency loan agreement being restructured;
- the repayment schedule for the consumer loan, which determines the amount of the monthly payment for the entire term of the agreement on restructuring obligations under the consumer loan”.
The law also establishes a moratorium on property repossession and sets its duration at two years.