Alina Radu, CSALB conciliator: We are at the moment when transparency and dialogue with customers is crucial for a bank

8 years ago, after the establishment of CSALB, consumers were coming with a rather aggressive approach, blaming the banks exclusively for what was happening to them. But now they come to negotiate, Alexandru Păunescu states.

Alina Radu, CSALB conciliator, Partner lawyer and Alexandru Păunescu, legal director of the BNR, president of the CSALB College, in dialogue with Cornel Dinu, founder of Banking News.

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

Alexandru Paunescu: Awareness starts with education. Eventually what does it meanfinancial education? It is the ability of a consumer to evaluate the products made available to him and decide (with some average information) which product suits him best. Ultimately, it is the financial institution that must provide the consumer with some minimal information about the product being sold. It’s just that it’s just as important for that consumer to go with a few elements beforehand. To know what a credit agreement entails, for example.

If we refer to the existing legislation we are talking about unpredictability. That is, things are no longer the same as they were when that contract was concluded. This unpredictability must be carefully analyzed by consumers: in such a long period of time (up to 30 years) even the major change in the general economic situation can happen, because a mortgage loan, for example, can cross more many economic cycles. But the bank, on the other hand, must be aware of the fact that at some point the consumer, finding himself in an unforeseen situation, will need its support to be able to continue the loan.

And then there are those options that consumers have been accessing through CSALB for so long:of re-scheduling, rescheduling, reducing some costs. That we are talking about fees, including reducing the principal balance, credit and so on. There are situations in which the two parties must re-balance the contract, which does not become unbalanced as a result of the action of one of the two parties, but because unforeseen situations often occur for both parties. If you remember, a few years ago, some state institutions said that banks enslaved consumers. By giving them a loan, the bank turned them into slaves. People are not slaves to the banks, but to their own goods that they purchased with the respective loans.

Fortunately, since CSALB was founded 8 years ago, things have changed radically:

if at the beginning the consumers came with a rather aggressive approach, throwing the blame exclusively on the banks for what was happening to them, at this moment they come to negotiate with the banks within the CSALB.

Cornel Dinu: If in the period 2006-2008 people were euphoric because they wanted to rise above the level at which they had lived until then, after the financial crisis of 2008, house purchases, mortgages became much more responsible… Alexandru 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 mortgages they were granted sometime in 2001-2002. In the years of euphoric lending, it was rather a necessity to reduce the gaps between us and the Westerners who had half a century at their disposal to develop their own person and wealth.It was a lack of experience rather than a lack of financial education. The experience of having a loan, the possibility, the ability to take a house. So the consumer approach is somehow justifiable.

I could not say that the manner of approach on the part of the banks was equally justifiable. In this euphoria everyone went on growth. Banks wanted to gain market share, the loans given in Swiss francs appeared and it seemed to be a much more advantageous 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 strongly in relation to the franc.

After the financial crisis, the blame was placed only on the banks, and things took a populist turn. In fact, it was not the fault but the responsibility that lay on both sides. It is true that the banks could have been a little more diligent with the information they had. Do you remember the famous commercials at credits with the bulletin for which it didn’t matter if you had an income certificate.

You used to get all kinds of credit cards in the mailbox, products that are mostly aimed at people with high incomes. The functionality itself a credit card was not sufficiently explained by the banks. We had to experience capitalism for things to crystallize. I remember that somewhere around the 2000s I was talking to some friends in Greece who told me that they bought a washing machine and a TV with interest-free installments. Our banks did not offer these products at the time.

Cornel Dinu: How has the banks’ approach changed over the years and what have they learned from collaborating with CSALB?

Alexandru Paunescu: It was quite a long period of time that CSALB had to earn the trust of both parties. I, at that time, as the coordinator of the whole project, expected the beginning to be difficult. First of all, the idea of ​​conciliation, negotiation, compromise was something quite exotic during the peak period of the conflict, in 2015-2016. The fact that the Central Bank was present in the CSALB project represented a presumption of trust. However, it had to be proven that CSALB is viable, that it can offer a solution and represent a clear alternative to the court. First of all, we had to gain credibility, and this happened primarily due to the reputation of the conciliators: professors at the Faculty of Law, lawyers, former judges, supported and trusted this project.

Cornel Dinu: But for a consumer what should CSALB mean and how can this institution help him?

Alina Radu: Basically, right where a consumer would not win the case in courtbecause, for example, the contract is correctly made by referring to the legislation that is now in force regarding consumer protection, the possibility of obtaining benefits under CSALB remains open, following the negotiation 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 some solutions, some consumers accepted those proposals, and others went to court. However, in court there were various sentences, some in favor of consumers, others in favor of banks.

What I can notice lately is that there are consumers who define their financial needs well when they approach CSALB, but they don’t know how to approach the bank. And then our task comes in to see how we translate for the bank the needs that consumers have so that we can help them.

Lately I have had many discussions with consumers where they said that if they do not get an agreement from the bank with which they have a contract, they will refinance their loan to another bank and leave the credit institution that has shown itself inflexible to their needs. We are at a time when transparency and dialogue with customers is crucial for a bank. On the other hand, there are also people who, although they have no real needs, try a little to take advantage and exploit the context. Cornel Dinu: You have said several times that CSALB wants judges to recommend that litigants settle out of court. How many lawsuits were the courts relieved of due to the negotiations within the CSALB?

Alexandru Paunescu: The figures doubled from year to year. I am in the last three years over 500 files that came from the court and settled amicably at CSALB. We hope that this figure will increase, and for this reason we are asking the judges for the contest, especially since it is also to their advantage to get rid of some of the cases with which they are burdened. It is very important that people who go to court know from the judges that there is the possibility of an alternative solution

.

If we are already talking about some files that are at an advanced stage of resolution in the courts, the banks don’t necessarily have an interest either, because they are very close to the verdict in those cases. But if a dispute is at an early stage, they also have an interest in settling it amicably, because of the costs involved in a lawsuit. We want the banks to do their litigation analysis and to see in which of them they can get along with the consumers and call them to conciliation themselves. Here, in more than 500 situations, banks have succeeded in replacing the battle in court with the benefits brought by the trust gained from consumers. We are not talking about an obligation for magistrates to inform the parties that the CSALB exists. We are talking about the advice they can give to the parties that a dispute can be resolved amicably.

Article supported by CSALB