The MPs of the Party of Action and Solidarity (PAS) presented a legislative proposal aimed at ensuring greater transparency in advertisements for loans. More exactly, they suggest that the effective interest rate on loans should be indicated with letters that would be three times larger than other information included in the ad. In a news conference, PAS MP Dorian Istrati said this will enable the consumers to better understand the conditions in which consumer and home loans are provided, IPN reports.

The bill contains amendments to the Law on Loan Agreements, the Civil Code and the Law on the National Bank of Moldova. Changes will also be made to a number of normative documents. “Being lured by often nontransparent advertisements for loans, the citizens can experience conditions of abject poverty and risk losing their property owing to a loan of several thousand lei. This is due to the low level of financial-banking knowledge of the population and to the considerable influence of nontransparent loan advertising that is delivered to consumers in an erroneous way,” stated Dorian Istrati.

Another proposed amendment bans floating interest rates on loans in the amount of up to three average official salaries. If the consumer pays fixed interest that is specified when signing the contract, this will avoid “surprises” when the interest rate increases substantially in several months of the raising of the loan.

Also, the sponsors suggest obliging the creditor to notify the debtor electronically every time the average interest rate in the banking sectors is decreased by one percentage point against the average rate existing when the loan agreement is signed. Also, the National Bank will have to systemize the information on an interbank platform that will enable to identify the most favorable lending conditions.

The legislative proposal is to be registered with the Parliament’s Secretariat.