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The main amendments to the Supervisor of Banks' Directive are:
 

 

  • Banks will be required to provide a borrower who is in arrears with detailed information regarding his right to appeal to a "special committee" and ask for leniencies in payments;

 

  • Banks will be required to provide a borrower who is in arrears with detailed information regarding how to contact relevant parties at the bank;

 

  • The banks are required to ascertain that each request by a borrower to reach a payment arrangement for debts in arrears, sent to the bank's attorney, be brought to the attention of the bank;

 

  • The banks shall notify borrowers regarding their obligation to update the license holders acting in accordance with the Credit Data Service Law.

 

The Supervisor of Banks is applying a requirement upon banks to expand the information that they must provide to those taking housing loans regarding their rights if they fall into arrears in repaying their loan.  The amendment will come into force on August 1, 2013.

 

The first amendment to the Directive, which was formulated following a discussion held in the Knesset Economic Affairs Committee on a bill submitted by MK Eitan Cabel, deals with those taking out housing loans with partial or full financing by the State.  Such borrowers are entitled, by law, to submit a request to a "special committee" to provide easier terms for the repayment of the loan due to the borrowers' financial situation. The amendment expands the information that the banks must provide to borrowers as part of the notice regarding late payments, and it includes a demand to provide a detailed explanation about the borrower's right to appeal to a special committee, the purpose and composition of the committee, the manner in which the request to the special committee must be submitted, and the documents that must accompany the request. The purpose of the amendment is to expand the information brought to the attention of the borrowers regarding their rights in a case where they have encountered difficulties in repaying their debts.

 

An additional amendment to the Directive, which relates to all those taking out housing loans, sets forth that, in the notice of lateness in payments, the bank shall include, among other things, details on how to contact the bank in all matters concerning the debt in arrears.  This is in order for the borrower to clearly know to whom he should turn and how to make contact with the appropriate party.  The bank is also required to take appropriate measures to ascertain that every request by a borrower to reach an arrangement for a debt in arrears that is referred to the bank's counsel be brought to the attention of the bank in order to allow it to assess each request on its own merits.

 

A further obligation placed on the banks is to bring to the attention of the borrower, as part of the warning letter regarding its intention to initiate proceedings to recover the debt, that if the borrower does not repay the debt or does not reach a repayment agreement within 60 days, the bank is obligated to update the license holders acting in accordance with the Credit Data Service Law that this letter has been sent to the borrower.  The purpose of the amendment is to notify the borrower that not repaying the debt may have ramifications on the information that appears in the credit data report provided by the license holders.