The GVH-s position regarding the commitments of OTP Bank on the market of mortgage loans for the purpose of purchasing a house
The GVH learned from several sources recently that OTP Bank provided its clients with dubious information on its commitments accepted by the GVH relating to the housing loan industry. Due to the complaints concerning the information, the questions asked by consumers in connection with the details of the commitments and the content of the information obtained by the GVH it is necessary to make clear the position of the GVH included in the order terminating the case and to answer the most frequent questions.
According to the information provided by the financial institution its clients were notified until 31 January 2008 about the re-establishment of the upper ceiling of handling fees. However, the notification sent to the clients by OTP Bank Nyrt. contains dubious phrases: it suggests that the increase of the upper ceiling of handling fees was required by the GVH. The GVH did not oblige OTP to do this, as this would be beyond the authorities competence. The phrase suggesting that the increase of the upper ceiling of handling fees fits the requirements of the GVH, or that this step was approved in advance by the GVH is misleading.
In December 2007 the GVH decided to terminate the proceeding initiated against OTP Bank because the financial institution undertook commitments that were suitable, according to the authoritx, for ensuring the protection of public interest effectively. When accepting the commitments the GVH considered as a significant circumstance that in this way a considerable number of clients got compensation simply and within a short time, avoiding the long and expensive litigation.
OTP Bank undertook the following commitments:
To pay back the amount charged above the original ceiling of handling fees to the clients of OTP Bank and OTP Mortgage Bank With respect to both OTP Bank and OTP Mortgage Bank it undertook the re-establishment of the original handling fees. Furthermore, before the next raise of the fee it would inform all customers directly, ensuring 90 days for them for switching.
Regarding the repayment fees OTP Bank undertook the repayment only with respect to its own clients; the same applies to the possibility of the repayment of the loan according to the original conditions for a period determined by OTP Bank in the commitments. (Which means that the clients of OTP Mortgage Bank Zrt. will not get their money back in connection with the repayment fees.)
Obviously, the commitments of OTP Bank do not mean that in the future the amount of its handling fees will not be increased at all. However, if the financial institution intends to modify the handling fees, according to the commitments, clients must be directly informed about the decision 90 days before its effectuation. This is necessary, because in this way clients discontented with the new conditions get to know the disadvantageous changes in time, thus they have the chance to refinance their loans with more advantageous loans of other banks.
The background materials of this case are available on the homepage of the GVH and as an appendix to this press release. The full text of the order terminating the case is also available on the homepage of the GVH.
Budapest, 06 February 2008
Hungarian Competition Authority
Hungarian Competition Authority
Address: 1054 Budapest, V., Alkotmány u. 5
Postal address: 1245 Budapest 5, POB 1036
Tel: +36-30 618-6618