On 21 October 2020, Croatian Member of the European Parliament (MEP) Ruža Tomašić of the European Conservatives and Reformists Group posed a written parliamentary question to the European Commission:
“In Croatia, a large number of citizens are over-indebted, which has led to the initiation of a large number of enforcement proceedings and, consequently, to the blocking of debtors’ bank accounts, or to their eviction.
In these many cases of over-indebtedness, RBA cooperatives are conspicuously implicated. These are Austrian cooperatives which falsely present themselves to the public as part of the Raiffeisen Bank group. Relying on a well-established network of unscrupulous bankers, intermediaries, lawyers and notaries, these groups lent large sums of money to Croatian citizens without checking their solvency and risk, in violation of all rules on informing debtors of their obligations.
Debtors could not fulfil such obligations, which quickly led to the initiation of a large number of enforcement proceedings, to evictions and the blocking of citizens’ accounts, and even to the suicides of some debtors. Approximately 15 200 such contracts have been concluded in Croatia. For comparison, in Hungary and Slovenia only 28 and 480 such loans, respectively, were approved.
Is the Commission aware of cases of loans being approved by RBA cooperatives which systematically violate the regulations of the Member States?
In accordance with Directive 93/13/EEC, does the Commission consider that the conduct of creditors and intermediaries in this context could lead them to be held criminally liable?”
On 3 February 2021, Justice Commissioner Didier Reynders responded on behalf of the European Commission stating: “The Commission is aware that, in Croatia, Raiffeisenbank is one of the banks that has been involved in litigation with consumers. Whether EC law is applicable to the practices referred to, and if so, which provisions of EC law might be relevant, depends, inter alia, on when the relevant loan agreements were concluded and whether the loans in question were mortgage loans or consumer credit agreements.
In cases of lack of transparency and unfairness of standard contract terms, Directive 93/13/EEC could be applicable. Whether unfair commercial practices within the meaning of Directive 2005/29/EC or the use of unfair contract terms may constitute a criminal offence depends on the criminal law of the relevant Member State.
The Mortgage Credit Directive could also be applicable, but it applies only to contracts concluded after 20 March 2016.
More generally, the financial vulnerability of consumers is being addressed in the New Consumer Agenda that the Commission presented recently.
The Agenda proposes to enhance debt advice and foresees a proposal for the revision of the Consumer Credit Directive. Like the Mortgage Credit Directive, the Consumer Credit Directive imposes an obligation on lenders to carry out a creditworthiness assessment before granting a loan that falls within its scope in order to ensure responsible lending.
The planned proposal will aim to further strengthen the protection of EU consumers, including in the areas of creditworthiness assessment and responsible lending.
It is for the national authorities and courts to enforce compliance with EU consumer law. In particular, the national supervisory authorities have to make sure that banks respect the applicable rules in the field of financial services.”
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