Parliament OKs bank law, sets FX conversion rate
The Hungarian Parliament today approved the law on converting retail mortgages denominated in foreign currency and the law on "fair banks", Hungarian news agency MTI reported. The laws are meant to assist borrowers hurt by the financial crisis of 2008 and subsequent declines in the value of the forint.
Regarding the law on conversion, the National Bank of Hungary is fixing the exchange rate for the conversion at an average of the rate between June 16 and November 7 – or the rate of November 7 – whichever is more favorable to borrowers. According to the expectations this would imply a rate of HUF 256.47 to the Swiss franc, HUF 308.97 to the euro and HUF 2.163 to the yen. Loans that had been denominated in foreign currency will be denominated in forints at those rates.
The law of “fair banks” establishes strict conditions for unilateral changes to interest rates and fees, as well as detailing rules for how lenders inform their clients of services and charges. Justice Minister László Trócsányi said earlier that the legislation aimed to broaden the defense of Hungarian consumers.
The FX law was approved with 116 voting in favor, 38 voting against with a single abstention, while the law on "fair banks" was passed with 115 voting in favor, 13 voting against and with 25 abstentions.
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