Consumer Bill: Minister of Consumer Affairs visits Union Loan

As part of his duties, the Minister ensures the protection of consumers and the respect of commercial relations. It prepares for the summer of 2013 a draft law on consumer credit. Benoît Hamon intends to fight against over-indebtedness by acting including revolving credit ( as a reminder, it is a reserve of money, accessible to any time, which is partially renewed over the repayments ).

The Lagarde law, revolving-killer


Since the implementation of the Lagarde law in 2010, the weight of revolving credit has fallen sharply (less 2 million in 2011 according to the Association des Sociétés Financières), thus reducing the risk of over-indebtedness. Specifically, the law limits the maximum duration of borrowing revolving credits (36 months for less than 3000 €, 60 months for a higher amount). “The Lagarde law has had positive effects. It has made it possible to refocus renewable credits on small amounts. These loans are not intended to reach 12,000 euros , but to finance small one-time expenses , “ confirms Benoît Hamon. The minister intends to strengthen this trend because according to him There is a real lack of information of the consumer, who continues to subscribe, in most cases, a revolving credit. We wish to modify the law so that it is obligatory for the points of sale to propose a depreciable credit as an alternative to a revolving credit, for any purchase higher than 1.000 euros »

The positive file, cornerstone of the fight against the over-indebtedness.

In addition, Benoît Hamon defends the implementation of the “positive file” already present in virtually all developed countries. Thanks to this file, banks will be forced to report systematically every new loan granted to an individual. Thus, credit institutions can immediately check the level of their client’s debt and decide not to grant them a loan.

Situation risks falling into over-indebtedness


In the meantime, the Minister emphasized the need to develop a responsible attitude to effectively prevent over-indebtedness. He participated in the complete study of a credit report and was able to note the seriousness of the Union loan acceptance pole.

Indeed, each request is the subject of a financial solvency analysis. Union Loan systematically requests for each request the Bank Account Statement of the borrower! A concrete and effective initiative, encouraged by the minister. In addition, he praised the persistent efforts of Union Loan which is the only credit institution to not offer revolving credit. Union loan is the very example that being a credit institution and avoiding revolving credit is possible!

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The system has already proven itself in Belgium, where the number of over-indebted Belgians fell by almost a quarter between 2002 and 2008. During his visit to Good Finance, Benoît Hamon announced that the positive file would not be put in place before the end of 2014, given the scale of the project.


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