On March 23 2001, the Swiss parliament passed a bill revising the legislation on consumer credits. The deadline for a referendum having run out on July 12 2001, the bill has overcome the most important obstacle to its becoming law. According to government plans, the new legislation will come into force on January 1 2003.
The present legislation on consumer loans gives an example of how different approaches to the same problem – the overindebtedness of private households – creates a confusion that the ordinary citizen, who is supposed to be protected under such legislation, finds difficult to resolve.
At present, four different sets of rules apply to consumer loans. Besides the act on consumer loans presently in force, which relates to consumer loans of up to Sfr40,000 ($24,000), Articles 226a to 226m of the Code of Obligations govern private installment payment transactions for goods. As these two bills partly overlap, the resulting conflict is resolved by a provision (Article 7 of the Act on Consumer Loans) stating that, where there is doubt, the stricter rule should apply. The legal uncertainty is aggravated by the fact that rules relating to the maximum interest rate are to be found in an intercantonal treaty and, further, that five cantons have legislated on relevant issues that impact their territory only.
The new federal legislation aims at combining these fragmented provisions into a well-structured whole. An example of the new provisions is that, in future, married persons applying for a loan will need the consent of their spouses. Also, the consumer may declare his withdrawal from the contract within seven days of concluding the contract. Further, the lender has to examine the question whether the borrower is able to carry the financial burden of the loan. If this examination is not carried out carefully, the lender will lose not only his claim for interest and costs but also for the borrowed amount. Finally, the bill contains rules on maximum interest rates as well as on the negotiation of loans. For further details see http://www.ofj.admin.ch/e/index.html.
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