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Banks hand over draft code of conduct to PSzÁF

The banks have drawn up their draft code of conduct, which was handed over to the Hungarian financial market regulator (PSzÁF) on Thursday afternoon, head of the Banking Association Péter Felcsuti said in a television program late on Thursday.

Felcsuti said the commercial banks accepted and adopted the concept reflected by PSzÁF's draft, when preparing their own position. He said there was an overlap of 70%-80% between the banks' and the authority's proposals.

The ten largest commercial banks were involved in wording the draft, he added.

Felcsuti said that banks are authorized to unilaterally change contracts by the law, which demands that such changes should be transparent. The debate concerns what this transparency should involve, whether amendments should be transparent to clients, who lack sufficient information to assess the terms or to the authority, which acts on behalf of the clients, and has the responsibility and powers to protect their interests.

Felcsuti favored the latter option, citing the example of energy prices, where consumers do not want to know what causes price changes but leave it to the energy office to control pricing practices.

Banks agreed to draw up the code of conduct to address issues such as unilateral changes to contracts, the task of informing clients and procedures for clients that fail to pay loan installments by the start of September, after a meeting with Prime Minister Gordon Bajnai in July. Daily Népszabadság reported, however, on Thursday that differences between banking industry insiders and regulatory bodies make it doubtful the document will be completed by the end of the month.

PSzÁF spokesman István Binder on Thursday confirmed for MTI that the financial market watchdog's outline for the code of conduct affected the entire practice of retail lending. The outline also gives PSzÁF the power to sanction banks that do not comply with the code of conduct.

The aim of the code of conduct as well as planned amendments is to end uncertainties in the understanding and implementation of a law which came to force on August 1. (MTI-Econews)