Parliament passes forex car loan conversion bill

Budapest, September 22 (MTI) – Lawmakers on Tuesday passed legislation which orders the conversion of forex car loans and personal loans into forints.

The conversions will be carried out at foreign-currency rates recorded on Aug. 19. this year, but conditions of conversion will be brought level with forex mortage conversions earlier passed into law so that car loan holders get the same deal.

Lawmakers passed the bill with 115 in favour, 2 against and 61 abstentions.

The new law, submitted by Economy Minister Mihaly Varga, is expected to reduce repayments of Swiss franc-based loans by 31 forints on the Franc. Banks will be allowed to deduct 50 percent of the reduction from their company and sectoral taxes. As a part of an earlier agreement with banks, the legislation locks in rates for the conversion at the National Bank of Hungary’s euro and Swiss franc fixings on August 19, although the more favourable rates earlier used for FX mortgage conversions will still be applied to clients’ balances. The difference between the two rates will be shared in equal part by banks and the state. FX mortgages were earlier converted into forints by law.

Hungarians have more than 200,000 FX vehicle loan contracts totalling almost 305 billion forints (EUR 983m).

Source: http://mtva.hu/hu/hungary-matters