Justice Minister Alma Zadic (Greens) announced this at a press conference on Tuesday. For Senior Citizens’ Council President Ingrid Korosec, this is a “milestone against age discrimination”.
Banks are currently using statistical life expectancy as a guide when checking creditworthiness, since loans have to be repaid in full by the end of life as expected according to the mortality tables, regardless of existing collateral. In addition, some institutes also set a maximum age. If people of an older age then convert their apartment or house to make them older or just want to replace their heating system, they may no longer get a loan for this.
According to Zadic, the amendment, which was based on the German model and is scheduled to come into force on April 1, 2023, is intended to regulate the circumstances under which life expectancy may be disregarded when granting loans. In the future, it just has to be more likely that the borrower will be able to pay the current loan installments during his or her lifetime. In addition, the assets serving as collateral must be able to cover the liabilities.
Video: The statement by Justice Minister Alma Zadic
With the regulation, senior citizens should senior citizens (but also younger people who have a shorter life expectancy due to illness) no longer need to be dependent on support from family members. “In addition to health care and the care system, the financial sector is crucial for an independent and self-determined life in old age,” said Korosec. “The way to the bank does not happen for fun and frolics, but to be able to live independently and self-determinedly.”
The amendment is flanked by other regulations, according to Consumer Protection Minister Johannes Rauch (Greens). In the future, for example, the death of a borrower should no longer automatically lead to the termination of a loan agreement. The heirs should be able to decide to enter into the loan agreement as universal legal successors. In addition, the banks are obliged to show “reasonable forbearance” – for example, they should not be able to sell a house that is used as security immediately. Rather, the heirs should be given the opportunity to use it themselves.
The new regulation is welcomed by the banks. “Seniors and senior citizens are a particularly valued customer group of Austrian banks,” emphasized Franz Rudorfer, Managing Director of the Federal Banking and Insurance Division of the Chamber of Commerce, in a press release. However, “the current regulatory framework repeatedly does not allow lending, even if there is sufficient collateral, because The primary focus is on the ability to repay from current income.”
Video: The statement by consumer protection minister Johannes Rauch
Source: Nachrichten
