Government Wages War Against Banks in Croatia

The Croatian government has waged war against the banks with its new Consumer Credit law that it is set to introduce, after a government session on Thursday.

“We want to sharpen the government’s attitude towards credit institutions,” said Finance Minister Slavko Linić, stressing that the government’s goal is to strengthen the protection of citizens in their relations with the banks.

Under the new law, bank fees will have to be related to the real cost of any lending, and banks will not be able to introduce any new charges after the conclusion of the loan agreement. Bankers will have warn borrowers in writing about the risks that they will bear with regards to exchange rate changes, interest rate changes and loss of income.

The new law also brings greater protection to those borrowers in Swiss francs. Specifically, for those whose loans are related to a currency that is bolstered in a certain period by more than 20 percent, the interest rate and the interest margin must not be greater than the one agreed at the outset. This, according to the government, protects debtors who are victims of a rampage in interest rates.

“We want to limit the banks extra profit with this new law,” Prime Minister Zoran Milanović commented on Thursday.