Loans will be issued and debts collected in a new way: important financial innovations of February named

The coming February brought important legislative changes in the credit sector. Taking into account the fact that, judging by statistical data, almost half of the adult population of Russia has loans, innovations will affect millions of our fellow citizens who deal with banks, microfinance organizations and debt collectors. Moreover, the changes in laws that have come into force change the rules for obtaining loans, expiration of deposit terms, and “knocking out” debts. Experts commented on the details of the February financial news for MK.

Refusal of imposed insurance

On February 1, a rule came into force according to which the recipient of a bank loan has the right to refuse an insurance contract when applying for a loan. This can be done within 30 calendar days instead of the previous 14. Not only that: now it will be possible not only to cancel the insurance contract, but also to return the insurance premium in whole or in part.

In addition, banks will be required to notify about additional lending services (in particular, insurance) no later than one day from the moment the loan agreement is concluded.

Ivan Samoilenko, managing partner of the communication agency B&C Agency, comments:

“Imposing insurance when applying for a consumer loan is a violation on the part of banks, as the Central Bank has repeatedly stated. Now the amendments coming into force reinforce the rights of borrowers who can refuse insurance, and the bank, for its part, does not have the right to refuse a citizen to receive a loan.”

Natalya Milchakova, leading analyst at Freedom Finance Global, comments:

“According to changes in legislation, an individual borrower will now have the right, within 30 days from the date of signing a consumer loan agreement with a bank, to refuse the services of an insurance company if he considers them unprofitable and increasing the full cost of the loan. For borrowers, such an innovation is certainly a plus, and a very timely one, since interest rates have risen sharply, and at the same time, due to inflation, insurance services have become more expensive. An increased total cost of the loan could negate all the benefits of borrowing and turn servicing the loan into a heavy burden for the borrower, and a change in legislation will significantly make life easier for borrowers.

For banks, the innovation is also more of a plus than a minus, since an increase in the total cost of a loan can, in the current conditions, further reduce the demand for consumer lending and negatively affect the interest income of banks. But insurers will lose, since banks will now lose the right to forcefully impose expensive insurance services, and the innovation may not have the best effect on the financial results of insurance companies.”

Mandatory reminder about the end of the deposit period

From February 1, banks are required by law to inform their customers that their deposits are about to expire. Previously, most banks, if they did this, did so only on a voluntary basis. They must also inform the client about the expiration of the deposit no later than five calendar days before the expiration date of the bank deposit agreement. This will be done free of charge, and in the form (for example, SMS notification) that was chosen by the depositor when concluding an agreement with a financial institution. It is understood that during these 5 days the bank client will decide what to do next with his deposit and choose the most profitable option for storing funds.

The fact is that bank clients often forget that their deposit term is expiring – especially if its term is measured in years. If the deposit does not have an automatic extension, then the bank transfers the money to the so-called “on demand” deposit. Such a deposit does not have a term, but the rate on it is usually set purely symbolically – from 0.01 to 0.1% per annum. In this case, such deposit is withdrawn in whole or in part upon request.

Mark Goikhman, analyst at the Capital Skills Financial Academy, comments:

“This innovation is quite relevant. Many people really do not remember the end of the deposit period. And banks are in no hurry to remind you, because it is not profitable for them. After all, after the deposit period expires, it can either be extended on the bank’s terms or become practically free for it. And in this case, the investor may lose out on potential income. Therefore, advance notification to the owner of funds contributes to their more rational use.”

Anastasia Chumak, co-head of the investor rights protection practice at Intercession, comments:

“A priori, there can be no downsides to such an innovation. It is important for the depositor to know when his deposit expires. And timely notification will allow him to plan in advance how to use his funds as efficiently as possible. For example, he can open a deposit in the same or another bank under new conditions. Considering the current Central Bank rate, this is 15-16% per annum, which is very profitable. Or, it is possible to use a low-risk market instrument, such as federal loan bonds (OFZ) – with the same yield.”

Andrey Loboda, economist, director of communications at BitRiver, comments:

“Why don’t banks remind about the expiration of the client’s deposit? It would seem that this is very simple and certainly not an invention of the wheel, but the lack of such a notification turned into a problem that created inconvenience for deposit holders. Obviously, some banks, especially for clients served in the premium segment, made such alerts. This is already an indicator of the status and responsibility of the credit organization. But now such a service will be available to everyone. It’s just a matter of small things: don’t miss the bank’s notification and don’t confuse it with spam.”

Changing the rules of interaction between collectors and debtors

The new law on debt collectors, which came into force on February 1, makes significant changes to the rules for collecting overdue debts.

Collectors now face criminal liability in the event of threats on their part of physical violence, destruction of property, dissemination of defamatory information, demands to transfer valuables, or for other actions that violate the rights of the debtor and his relatives. Violating collectors can be imprisoned for up to two years.

In addition, they were limited in “telephone terror.” From now on, they do not have the right to contact the debtor on weekdays from 22:00 to 8:00. Contacts are also prohibited on weekends and holidays from 20:00 to 9:00 local time at the debtor’s place of residence. Moreover, personal meetings are allowed only once a week. At the same time, creditors are required to provide the following information during each telephone conversation: last name, first name and patronymic of the representative; last name, first name and patronymic (or name) of the creditor; information on the presence of overdue debt, its size and structure; information about the collection agency. By the way, to operate legally, collection agencies must be registered in the register maintained by the Federal Bailiff Service.

Andrey Loboda, economist, director of communications at BitRiver, comments:

“Changes related to the work of collectors indicate a continuing course to “whitewash” the collection business and, at the same time, to defend the rights of debtors. The times when collectors could sign the entrance, including using obscene language, or “run into” the debtor using physical force or means of intimidation, are irrevocably gone. The era of cultural interaction within the framework of the law is coming. It should be noted that strengthening control over the work of collectors helps to perceive their activities from a positive point of view. After all, if previously a debtor could respond aggressively to constant, including night calls from collectors, hang up or turn off the phone, now polite communication from collectors can even improve the culture of interaction between debtors and them. Agree, you hardly want to (at least immediately) curse the caller if he introduced himself in accordance with the regulations and is making contact in order to solve the debt problem, and not aggravate it.”