Aggressive advertising for small loans to be banned
Parliament wants to ban aggressive advertising for small loans in order to protect young people in particular from falling into debt. Following the National Council, the Council of States has also approved the corresponding amendments to the law.
The Council of States approved the amendments to the Consumer Credit Act on Thursday by 24 votes to 11 with 5 abstentions. It spoke out in favor of stricter rules than the National Council. It is already clear that Parliament will initially rely on self-regulation: The credit industry itself can define what advertising is considered aggressive. The law requires them to regulate this in an agreement.
The National Council and the Council of States still disagree on the question of when the Federal Council should intervene and determine what falls under the ban. According to the National Council, this should only happen if no agreement can be reached in the credit sector within a reasonable period of time.
More powers for the Federal Council
The Council of States also wants to give the Federal Council the authority to issue a regulation if it considers the industry agreement to be insufficient. It voted in favor of this version by 29 votes to 12 with one abstention. If the industry is completely free in terms of the content of the convention, the Council could just as well do without regulation, according to the majority.
In contrast to the National Council, the Council of States also said yes to tightening express loans that have to be repaid quickly. However, state intervention was also controversial in the small chamber. Some of the conservative members of the Council of States were completely opposed to regulation.
Taking young people seriously
Thomas Hefti (FDP/GL) called for young people to be taken seriously. Otherwise, the question arises as to whether the age of consent should not be raised. After all, you can drive a car, get married or vote at the age of 18. It is hard to see why young citizens are trusted to do this, but not to take out a consumer loan.
Peter Föhn (SVP/SZ) noted that it was sad how carelessly many people, young and old, get into debt. But: "Must a law be made immediately for every case of misconduct?" The responsibility lies with the industry and the borrower. The industry has recognized this and has already submitted a draft for a convention. A change in the law is unnecessary.
The general public pays
The proponents of regulation disagreed. It is in the public interest to prevent over-indebtedness, said Justice Minister Simonetta Sommaruga. People who are over-indebted are the first to stop paying their taxes and health insurance premiums.
Later on, those affected are often dependent on social welfare. "The costs of over-indebtedness are paid by the general public," Sommaruga noted. And advertising certainly plays a role, otherwise money would not be spent on it.
Request proof of wages
In addition to the ban on aggressive advertising, the councils have also decided to tighten up the creditworthiness check. Under the current law, the credit company only has to check the accuracy of the consumer's details if there are doubts about their accuracy. It will now generally be able to request documents such as an extract from the debt collection register or proof of salary.
A complete ban on advertising for consumer credit that specifically targets teenagers and young adults is off the table. After the National Council, the Council of States has also spoken out against it.
No forms on the street
The bill now goes back to the National Council. It is based on a parliamentary initiative by Josiane Aubert (SP/VD). In recent years, however, there have been numerous other initiatives on the subject, including standing initiatives.
The credit industry has now submitted a draft for a convention on self-regulation. According to this, it intends to refrain from distributing credit application coupons on the street in future, for example.
According to the Federal Statistical Office, 19% of young adults between the ages of 18 and 29 lived in a household that had taken out at least one consumer loan in 2008. Among 30 to 49-year-olds, the figure was 18.2 percent. In both age groups, around 9 percent lived in a household with a critical volume of overdrafts or arrears. (SDA)
