The National Authority for Consumer Protection considers that ING Bank Romania has forced clients to pay two interest margins, asking the bank to eliminate one of them and to refund the money to clients. However, ING obtained in court the suspension of this obligation until the complaint is judged on the merits, arguing that the measure would be extremely costly, and employees would have to recalculate the interest rates for almost 90,000 loans.
ANPC verified during July-September five contracts and additional documents issued on the occasion of the implementation of Emergency Ordinance 50/2010 and established that ING Bank violated the law, affecting the economic interests of consumers (according to Ordinance 21/1992), reports Profit.ro.
The Authority imposed the following remedial measures on the bank:
- remove the fixed percentage from the interest rate calculation formula, meaning to maintain a compound interest formula consisting of EURIBOR / ROBOR + margin;
- refund all amounts allegedly collected without legal basis from each affected consumer, following the introduction of the fixed percentage, amounts updated at the refund date.
The Bank invokes colossal efforts and costs
ING Bank challenged the decision in court, arguing that the facts have expired and that the remedial measures are blatantly illegal, and ANPC's order would seriously affect its operations, obtaining the suspension of this obligation until the complaint is judged on the merits.
ING Bank argued that based on ANPC's measures, it would need to modify a total of 89,636 credit contracts, of which 3,750 are ongoing, the rest being closed.
Moreover, ANPC's order would have a financial impact of approximately 346,123,910 lei. The amount is an estimate, in reality requiring a financial analysis of each credit contract, as stated in the court's reasoning.
Additionally, ING Bank estimates that around 291,000 working hours would be needed for the implementation of the measure, the process of implementing the measure for a single credit contract being estimated at 3.25 hours, with a cost of approximately 22,400,000 lei.
Furthermore, 185 employees would be needed to handle these measures, considering that it only has 87 employees serving the lending activity, the bank claims.
How did we get here
Until 2010, banks in Romania granted loans with variable interest rates established, generally, based on their own criteria, called the "bank's policy." Banks could revise these variable interest rates at a certain interval or whenever they wanted, and clients could not consult the basis of the banks' decisions nor anticipate them.
Banks have argued over time that internal reference interest rates were based on objective indicators, such as costs on international markets, risk costs, and others, but in reality, these things could not be verified.
In 2010, the Romanian Government decided that the provisions of Emergency Ordinance 50/2010 should also apply to current loans. However, banks would have incurred losses if they had replaced the bank's variable reference interest rate with EURIBOR for loans in euros, so they interpreted the legislation in their favor.
As a result, last year ANPC fined all banks, accusing them of deceiving their clients when granting loans in equal installments, but they have won almost all the court challenges judged so far.