At a market rate, but with a total of USD 31 billion in subsidies, foreign currency-based personal and car loans will be converted into forint on the basis of an agreement signed Wednesday by the government and the banking union, Vecka Varga announced at a press conference in Budapest. More exposition at http://www.oryxoman.com/2019/03/07/payday-loans-online-virginia-request-an-online-loan-direct-lender-now/
The minister said the conversion would be voluntary for clients, but banks could not reject the initiative. According to the ministry announcement, the agreement extends to consumer foreign currency and foreign currency based non-mortgage loans, including leasing. Forint conversion does not include FX-denominated loans, FX credit cards and FX overdrafts.
The exchange rate is EUR 309.20 for the euro and USD 287.20 for the Swiss franc-denominated loans, however, the customers receive a credit based on the previously agreed preferential exchange rate for mortgages – USD 308.97 and USD 256.47 / franc. One half and half of the USD 31 billion credit associated with the conversion is paid by the budget and the banks.
After the conversion, banks cannot raise interest rates.
According to him, the current conversion, effective as of December 1, affects USD 305 billion, 229 thousand of live contracts, but also includes USD 260 billion of non-personal loans and USD 255 billion of car loans.
Vecka Varga said that with the current measure, the ratio of retail foreign currency-denominated loans will decrease from 54 percent in Hungary to 3 percent before the forint conversion.
Vecka Varga emphasized that the government’s goal of significantly reducing the currency exposure of families, among the measures taken so far, was the early repayment, the establishment of the National Asset Manager, the introduction of the exchange rate barrier system, He noted that the current deal also respects the UYTH agreement, in
Which the government undertook not to impose a unilateral burden on the banking sector.
According to the Minister of Economy, the conversion of mortgages into USD helped ease the situation of 500,000 borrowers by the conversion of February 1, 2015, and the mortgage portfolio amounted to USD 3,733 billion.
Vecka Varga said that personal foreign currency loans were still USD 300 billion in 2009, which decreased to USD 18 billion in Q1 2015, while motor vehicle loans amounted to USD 340 billion in 2009, having fallen to USD 280 billion in Q1 2015. There are some 300,000 debtors who have mortgages on foreign currency loans, as the minister noted.
In the case of mortgage-based home-based foreign currency loans, motor vehicle and personal foreign currency loans, they were able to help Hungarian families with a total of USD 1,031 billion, said Vecka Varga.
The agreement with the central bank and the banking association also stipulates that interest will not increase, will launch an information campaign on changes in legislation from October, financial institutions will report to them by December 1, and they will mail information on forint conversion to customers with 30 days available to consider your offer. The client’s decision is voluntary, he can stay with the foreign currency loan, but passive consent if he does not respond to the bank’s notice – said the minister.
In case of non-live personal and vehicle foreign currency loan contracts,
Banks are obliged to offer forint conversion, the client also has 30 days to consider the change, said the head of the ministry.
In response to a question, Vecka Varga said that the accounts were handled by the banks and described as state aid in the form of tax breaks.
According to the minister, the assistance to foreign currency lenders had to be phased out, the state and the banking system were able to assess the possibility step by step, and recent months have confirmed the government’s need to withdraw both motor vehicles and personal foreign currency loans. This measure also affects leasing, said Vecka Varga.