An expected stronger role of ABDRC with the new legislative changes. For the whole range of loans, banks are required to prove previous attempts of restructuring the debts with payment delays longer than 90 days. Such restructuring should consider the consumer’s situation and include refinancing, deferral or stay of instalment payments, interest rate changes, currency conversions, or partial debt write-offs. All these measures can be found now in the Government Emergency Ordinance No 15/2024 (previously, in the Government Emergency Ordinance No 52/2016 on mortgage loans). Furthermore, these are also the solutions that conciliators have been proposing in consumer-bank negotiations ever since 2016, in conciliations held at the Alternative Banking Dispute Resolution Centre (ABDRC). Thus, this recently-adopted statutory obligation could increase the number of amicable settlements via ABDRC, for both loans that are threatened by enforcement, and those already in enforcement proceedings. Here are some of the topics discussed in the third episode of #PodcasturileCSALB, featuring Ciprian Chiorean and Mircea Stroe, and moderated by Vasile Coman.

Here are some of the topics discussed in the third episode of #PodcasturileCSALB, featuring Ciprian Chiorean and Mircea Stroe, and moderated by Vasile Coman.

| ABDRC PODCAST | https://www.youtube.com/watch?v=rNPCeKxwZbY

This is the 4th season of interviews with senior executives of the banking system and legal experts. In 2023 and again this year, leading business journalists are invited to debate the hot banking topics in the Alternative Banking Dispute Resolution Centre (ABDRC). In 2024, we review the news and their impact on the financial and banking market, as well as how consumers relate to their credit institutions and personal finances, against a volatile and unpredictable socio-economic background.

“2024 kicked off with an important legislative amendment that is positive for consumers and will strengthen their relationship with banks. The Government Emergency Ordinance No 15/2024 places on creditors the obligation to provide proof of having attempted to restructure the loans under which consumers have not be able to make payments anymore, and reached the enforcement stage. Thus, banks are required to take specific steps to improve the contractual relationship with a customer experiencing payment difficulties, before pursuing enforcement of the collaterals. Even though banks used to come up with recovery and restructuring measures also before the passing of this Ordinance, this piece of regulation now makes this approach a formal obligation. It is a piece of good news for both consumers and banks, as no credit institution really wants to have their customers in enforcement proceedings. For a bank, an non-performing customer means additional costs: to set up provisions, to pursue enforcement proceedings, or to manage these non-performing loans.

Banks are interested in having financially-healthy customers and a customer-bank relationship based on partnership. Bank want to see any potentially conflictual situation addresses as quickly as possible. Often, we do this via ABDRC and we see that the consumer-bank relationship has settled down a lot compared to 15 years ago. A better understanding of the contracts and their terms has helped a lot this relationship.”

“Do you expect this legislative amendment to bring about any changes? Will there be more amicable settlements via ABDRC to avoid enforcement?”

“For sure we will see the parties more open to sit down and negotiate, before entering a formal conflict. And ABDRC is the right setup for such a dialogue. People have realised that their disputes with banks need to be settled quicker, particularly when their problems ended up in courts. Unfortunately, the judiciary is unable to provide solutions for these cases earlier than 12 to 24 months. On the other hand, the average resolution time via ABDRC is only 25 days.

Here are two relevant examples why consumers are eager to have their grievances against banks addressed amicably: we had conciliation cases where consumers were themselves magistrates, but still filed applications with ABDRC. In other words, the benefits of conciliation have come to be understood even by some representatives of the judiciary. Even magistrates have realised that, despite them being more familiar with the courts of law, they have more to gain from an alternative to court proceedings via ABDRC. Moreover, we have also provided conciliation to consumers coming from the banking system, some of whom were employees of the very bank they had issues with.

A benefit of shifting from court or enforcement proceedings to ABDRC is the fact that, in these cases, the parties’ claims had already been formally stated. The disputed debt amount is well known, and so are the expectations of the credit institution as to the payment term and how much the consumer is willing or able to pay. Obviously, when enforcement proceedings have already been commenced, a certain amount of frustration builds-up because steps have already been taken, and we could face some displays of ego or ambitions. Nevertheless, in general, parties are more willing to compromise.”

“CEC Bank is the former Savings Bank, and enjoys a good position also in rural areas and, being a State-owned bank, people have kept their trust in this institution. Do you see this perception as an asset of the bank?“

“Our more than 1,000 banking units and 1,300 ATMs across the country are definitely an asset, considering the moral duty we have towards Romanians to facilitate financial inclusion, even in areas more difficult to reach by other banks. We try to serve even rural areas, where virtually the only link to the banking world is often a CEC Bank ATM or unit. That is why we will keep this network in place, even the market trend for other players is to reduce the number of their territorial units.

We wish to build a mix of technology and human presence for our customers, since people seem to have had enough of talking to robots. We are considering digital solutions because we want to provide fast access to all our services and products, but the human factor remains very important.

CEC Bank have raised to be the 3rd in the banking industry, with a 35% increase in assets versus the previous year. The acquisition of the Rural Credit Guarantee Fund made us an important banking group. Now we work hard to set up an insurance company. In all our projects, our focus is on human interaction, and we want to continue to give our customers the chance to interact with a bank employee. Obviously, such growth comes with certain risks, the biggest of which seems to come from online fraud.

Every bank has a category of vulnerable customers, who are not very familiar with digital tools and cannot fully grasp this phenomenon, and then they become targets of choice for cybercriminals. Instant payments, which most banks use, are targeted most in online fraud. That’s why we always warn users not to reveal their PIN code and not to access unauthorised links, whether they receive them by email or text message.”

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 About ABDRC: ABDRC is an entity set up under a European Directive, and intermediates, free of charge and in not more than three months, negotiations between consumers and banks or NBFIs, for contracts/agreements in progress. Consumers from any county of the country may file applications with the Alternative Banking Dispute Resolution Centre (ABDRC) filling-in an online form directly on the website www.csalb.ro. Once the bank accepts to enter the conciliation/negotiation procedure, a conciliator is appointed. ABDRC works with 17 conciliators, of the best specialists in law and with relevant experience also in the financial and banking field. Everything is settled amicably, and the understanding between the parties has the power of court judgment. More information about the work of the Centre is available by phone at 021 9414 (charged a normal rate).