The introduction of a ceiling on t. Pomegranate. Annual percentage rate (APR), according surprisingly tabled at the last minute texts, the annual percentage rate of charge (interest plus all fees) may not be higher than 5 times the statutory interest on overdue obligations. Currently it is 10% plus the base rate (0.4%), totaling 50.4%.

Even some of the lawmakers who are importers of other texts in the bill is very clear that this restriction automatically disables part of the credit market - namely, that the so. Called. Fast loans. On this market, the APR is usually a three-digit or four-digit number even because of the high risk of default on the loan because of the tight deadlines that are granted these loans. In an event of a loans company going public through, it will most likely obey the global rules.

I.e. this provision actually poorest borrowers who resort to fast loans when pressed to the wall, will now be left with the only option to seek loans from illegal moneylenders, where conditions are far more favorable and legal protection of borrowers did not exists.

Last but not least in the mortgage borrower will be able to choose whether enforcement (ie inability to pay the loan) is liable only up to the amount of the mortgaged property or be liable to the extent of all his assets in Law of Obligations and Contracts.

In other words, if you choose the first option, which will generally be preferred by the borrower, then the bank will sell the mortgaged property at the market price at the time, whether it is higher or lower than the loan, and will delete the loan.

Currently, after the sale of property the borrower remains liable to repay the balance of the loan, if any (for lowering the price of the mortgaged property). Without looking at the philosophical question whether it is fair or not the borrower remains liable to cover the loan after the sale of the mortgaged property when sale proceeds do not cover the entire debt, the new provision apparently transferred fully to market risk from changes in the price of the property borrower to the bank. This risk again can not affect otherwise mortgage but to them more expensive.