8 years ago, after the creation of CSALB, consumers took a rather aggressive approach, blaming only the banks for what was happening to them. But now they have come to negotiate, says Alexandru Peunescu.

Cornel Dina, Alina Radu and Alexandru PeunescuPhoto: CSALB

Alina Radu, CSALB Mediator, Partner Lawyer, and Alexandru Peunescu, Legal Director of BNR, President of CSALB College, in dialogue with Cornel Dinu, Founder of Banking News.

Cornel Dean: I would also like you to tell us how much CSALB can contribute to raising awareness about the importance of effective money management?

Alexander Paunescu: Awareness starts with education. Eventually What does it meanfinancial education? It is the ability of the consumer to evaluate the products presented to him and decide (with some average information) which product suits him best. Ultimately, the financial institution must provide the consumer with some minimum information about the product being sold. The fact is that for this consumer it is equally important to prepare in advance for several elements. To know, for example, what the credit agreement provides.

If we turn to the current legislation we are talking about unpredictability. That is, everything is no longer the way it was when that contract was concluded. This unpredictability must be carefully analyzed by consumers: for such a long period of time (up to 30 years), even a serious change in the general economic situation can occur, because a mortgage loan, for example, can cross many economic cycles.. But the bank, on the other hand, must be aware that at some point the consumer, finding himself in an unforeseen situation, will need his support in order to be able to extend the loan.

In addition, there are the options that consumers have had access to for so long through CSALB:re-planning, re-planning, cutting some costs. That is, we are talking about commissions, including for reducing principal debt, credit, and so on. There are situations in which both parties must review the contract, which becomes unbalanced not as a result of the actions of one of the two parties, but because unforeseen situations often arise for both parties. If you remember, a few years ago some government agencies said that banks enslaved consumers. By giving them credit, the bank turned them into slaves. People are slaves not to banks, but to their own goods, which they purchased with the corresponding loans.

Fortunately, things have changed radically since CSALB was founded 8 years ago: If at first consumers took a rather aggressive approach, placing the blame solely on the banks for what is happening to them, now they are coming to negotiations with the banks within the framework of CSALB.

Cornel Dean: If in the period of 2006-2008, people were in euphoria because they wanted to rise above the level at which they lived until then, after the financial crisis of 2008, buying a home and mortgage became much more responsible…

Alexander Paunescu: Between 2006-2008, it was a problem related rather to the experience we had immediately after the communist period. We practically did not exist in the capitalist market, we did not have a market economy for more than 50 years.

First mortgage loans they were provided sometime in 2001-2002. In the years of euphoric lending, it was rather a necessity to close the gap between us and the Westerners, who had half a century at their disposal to develop their own personality and wealth.It was a lack of experience rather than a lack of financial education. The experience of having a loan, the opportunity, the opportunity to take housing. So the consumer approach is somewhat justified.

I cannot say that the manner of approach on the part of the banks was equally justified. In this euphoria, everyone started to grow. Banks wanted market share, loans in Swiss francs appeared, and it seemed a much more profitable option for consumers, and not in the short term, but in the long term. No one thought that at some point the Bank of Switzerland would change its monetary policy and that the leu and other currencies would depreciate very much against the franc.

After the financial crisis, only the banks were blamed and everything became populist. In fact, it was not the fault, but the responsibility lay on both sides. It is true that the banks could have been a little more thorough with the information they had. Do you remember the famous advertisement on loans with a bulletin for whom it was not important to have a certificate of income.

You used to get all kinds of credit cards in your mailbox, products that were mostly aimed at high-income earners. The very functionality a credit card was not sufficiently explained by the banks. We had to experience capitalism for everything to crystallize. I remember, sometime in the 2000s, I talked to friends in Greece who told me that they had bought a washing machine and a TV in interest-free installments. Our banks did not offer these products at that time.

Cornel Dean: How has the approach of banks changed over the years and what have they learned from working with CSALB?

Alexander Paunescu: It was quite a long period of time CSALB had to earn the trust of both parties. As the coordinator of the entire project, I expected that the beginning would be difficult. Firstly, the idea of ​​reconciliation, negotiations, compromise was something rather exotic during the peak of the conflict, in 2015-2016. The fact that the Central Bank was present in the CSALB project was a presumption of trust. However, it was necessary to prove that the CSALB was viable, that it could offer solutions and was a clear alternative to the courts. First of all, we had to win trust, and this happened primarily thanks to the reputation of peace mediators: law faculty teachers, lawyers, former judges supported and trusted this project.

Cornel Dean: But what should CSALB mean to the consumer and how can this institution help him?

Alina Radu: Basically, right where the consumer is won’t win the case in courtsince, for example, the contract is concluded correctly with reference to the current legislation on the protection of consumer rights, the possibility of obtaining benefits under CSALB remains open after negotiations with the bank.

This was also found in the case of loans in CHF. Consumers have seen that there is nothing black or white about this issue either. Banks came up with certain solutions, some consumers agreed to these proposals, and others went to court. However, there were different verdicts in court, some in favor of consumers, others in favor of banks.

Lately, I can see that there are consumers who are good at defining their financial needs when they approach CSALB, but they don’t know how to approach the bank. And then our task is to see how we translate the needs of consumers for the bank so that we can help them.

Recently, I have had many discussions with consumers where they say that if they do not get approval from the bank with which they have a contract, they will refinance their loan with another bank and leave the lending institution that has shown its inflexibility to their needs. We live in a time when transparency and dialogue with clients are extremely important for the bank. On the other hand, there are also people who, although they have no real need, try to take advantage of the context a little and use it.

Cornel Dean: You have said several times that CSALB wants judges to recommend that parties settle disputes out of court. How many lawsuits have the courts been freed from through the CSALB negotiations?

Alexander Paunescu: From year to year, the numbers have doubled. I am more in the last three years 500 files received from the court and settled peacefully in CSALB. We hope that this number will increase, and therefore we ask the judges for competition, especially since it is also beneficial for them to get rid of part of the cases with which they are burdened. It is very important that people who go to court know from judges that there is an alternative solution.

If about any cases that are at the final stage of resolution in courts, the banks don’t necessarily have an interest either because they are very close to the verdict in these cases. But if the dispute is at an early stage, they are also interested in resolving it amicably because of the costs associated with litigation. We want the banks to conduct an analysis of litigation and see in which of them they can come to an understanding with consumers and call them to reconciliation themselves. Here, in more than 500 situations, banks have succeeded in replacing litigation with the benefits of consumer trust. We are not talking about the duty of magistrates to inform the parties about the existence of CSALB. We are talking about the advice they can give to the parties that the dispute can be resolved amicably.

Article supported by CSALB