Lilleholt University of Oslo Consumer credit and responsible lending in Norway Consumer loans Loans taken by consumers irrespective of purpose Mainly nonsecured loans but mortgage loans for other purposes than acquisition of the property are common ID: 598381
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Slide1
Kåre Lilleholt, University of Oslo
Consumer credit and responsible lending in NorwaySlide2
Consumer loansLoans taken by consumers, irrespective
of purpose
Mainly non-secured loans
but mortgage
loans for other purposes than acquisition of the property are common
Loans for extremely
short periods and other consumer loans
Credit cards, overdraft facilities etc.
not dealt with here, but may serve the same purposesSlide3
Legislation and supervisionEEA agreement and EU rules
free movement of capital and freedoms of establishment
requirement of license;
s
upervision
credit
institutions with Norwegian branches and subsidiaries
cross-border consumer credit?
Financial Contracts Act
Rules on unfair terms etc.
Marketing ActSlide4
Loans for extremely short periods
Folkia
AS (
Monetti
)
Credit period 30 days
NOK 1000
–
5000 (EUR
125
–625
)
APR up to
9245Slide5
Other consumer loansExample Bank Norwegian
Credit period one year or more
NOK
5000
–
400 000 (EUR 625
–
50
000)
Nominal
interest rate 8,99
–
21,44
Other banks
IntermediariesSlide6
Financial Contracts ActAlso implementing Directive
2008/48
Advertising
Pre-contractual
information
Duty to explain
Duty to warn
Formal requirementsSlide7
Procedures, exemplified by Folkia AS
Advertising (dir. art. 4)
amount, period,
credit costs (representative example) on the Internet
Pre-contractual information (dir. art. 5)
“in good time”, contract
details, on paper or other durable medium; but exceptions for voice telephony communication
Assessment of creditworthiness (dir. art. 8)
credit information agencies
no credit databaseSlide8
ctd. proceduresExplanations to the consumer (dir. art. 5(6))
by phone?
Warning against taking up the loan
written and
, if possible, verbally
written confirmation by consumer
breach may lead
to adjustment of the consumer’s obligationsSlide9
ctd. procedures
Written agreement (dir. 10)
use of electronic medium is
allowed
the contract must be available
secure method of authentication
current dispute with the Consumer Ombudsman
Returning customers
are offered “SMS loans”
overdraft facility?
current dispute with the Consumer OmbudsmanSlide10
Formation of Contracts ActContracts void for usury?
not applied in practice
General
clause on unfair terms
mostly a question of sufficient informationSlide11
Marketing ActControl of marketing
Control of
terms in standard contracts
Both by the Consumer OmbudsmanSlide12
Responsible lending and over-indebtednessNo
financial crisis
–
so far
employment numbers
bankruptcies
debt recovery
Requirements for owner’s capital
Capital requirements for banks
Housing bubble?
Duty to warn against credit seems to be of small practical relevance