Response to consultation on the benchmark rate under the Mortgage Credit Directive
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Yet, the proposed formula is satisfying.
ASF concern is about the effect on the consumer of a stressed simulation based on the EBA reference rate as regard to the French rule of maximum authorized rate (“taux d’usure”).
In fact it could lead to a situation where the rate to be used in the European Standardised Information Sheet, calculated on the basis of EBA’s formula, is above the authorized interest rate in France. From this point of view, it is essential that it is clearly established that the ESIS remains a non-contractual document and that EBA’s reference rate, used as an illustrative example of a stressed situation, is purely informative.
Question 1: Do you agree with the EBA’s approach to deliver the EBA benchmark rate by publishing a formula from which creditors can calculate the rate? If not, outline why you disagree and suggest an alternative approach including the reasons for the suggestion.
We do agree with the EBA’s approach.Question 2: Do you agree with the proposed EBA formula? If not, outline why you disagree and specify how the formula could be improved.
Most French institutions are currently using external references to determine residential loans variable rates. Against this background they’re not expected to use the EBA reference rate.Yet, the proposed formula is satisfying.
ASF concern is about the effect on the consumer of a stressed simulation based on the EBA reference rate as regard to the French rule of maximum authorized rate (“taux d’usure”).
In fact it could lead to a situation where the rate to be used in the European Standardised Information Sheet, calculated on the basis of EBA’s formula, is above the authorized interest rate in France. From this point of view, it is essential that it is clearly established that the ESIS remains a non-contractual document and that EBA’s reference rate, used as an illustrative example of a stressed situation, is purely informative.