MNB updates lenders' guidance for troubled retail borrowers
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The National Bank of Hungary (MNB) on Tuesday said it issued an updated set of steps lenders must take before canceling contracts with retail borrowers who fall behind on their installments, according to a report by state news wire MTI.
The central bank and financial market watchdog set a late payment threshold after which banks must establish contact with clients and outlined the timing and means of subsequent communication. It also laid down a "transparent" schedule of fees for late installments.
From September 1, when the new requirements come into force, lenders must dedicate a part of their websites to offering retail clients "well-structured and easy to understand" information on measures they take to deal with troubled borrowers and late installments.
Illustrating the impact of late payments on interest, fees and other costs with charts or diagrams is "good practice", the central bank said.
The watchdog expects lenders to apply "proportionate fees" when dealing with delinquent borrowers and to "prepare in advance" solutions to support those clients using restructuring, extension of loan maturities, or "other means".
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