The proposed Consumer Credit Law is set to provide advantages for citizens without significantly affecting the banking sector, according to economic analyst Mirza Mulešković in an interview with Radio Crne Gore. This view is echoed by the Ministry of Economic Development, which initiated the legislation, highlighting its alignment with best European practices.
A major change introduced by the law is the removal of fees associated with processing and early repayment of housing loans. Mulešković noted that these amendments will lower costs for consumers, marking a positive shift in line with European standards, which have also received endorsement from the European Commission.
The Consumer Protection Center has achieved favorable court decisions regarding collective lawsuits related to processing fees and early loan repayments. Željko Tomović from the Ministry emphasized that these factors were instrumental in shaping the proposed law.
Additionally, the law places a cap on interest rates for consumer loans, restricting them to the weighted effective interest rate plus 100 basis points. While advocating for a liberal economy, Mulešković believes this regulation will ultimately benefit citizens and may lead to lower interest rates. He suggested that increased competition among banks could encourage more attractive offers for borrowers.
Furthermore, the law requires banks to negotiate repayment plans with borrowers who are delinquent before initiating enforcement actions. Mulešković expressed optimism that this provision will enhance repayment rates for banks while ensuring more timely payments from consumers.
The legislation aims to bolster consumer protection and improve living standards. Mulešković asserted that the timing is right for such reforms, noting that the banking sector has largely adapted to European standards, evidenced by significant growth this year.
The Banking Association previously called for a transitional period and adequate system preparation. In response, the Ministry indicated that the law will be implemented nine months after its enactment, providing ample time for the system to adjust to the new regulations.
