FSA proposes stricter lending requirements

Monthly earnings up 2.6 per centMoney.Norwegian kroner.

On Thursday FSA  presented proposals for a more restrictive lending practices by Norwegian banks in order to curb the huge rise in house prices.

The authority gave an account of their proposals in a letter to Finance Minister Siv Jensen.

One of the proposals  is to remove the banks’ permission to deviate from the regulations for servicing, LTV and installment payment.

FSA also recommends that the government reduce the maximum loan to value ratio for credit lines from 70 to 60 percent.

Another suggestion is that “the current requirements for customers’ ability to be supplemented by a provision that the customer’s total loans should not exceed five times the customer’s gross annual income.”

The authority also propose  that the requirement of installment payment on installment loans is to apply to all loans with LTV above 60 percent, versus 70 percent in the current regulation.
–  We proposed that these measures are implemented from 1 January 2017,  the Financial Supervisory Authority writes in its letter.


Source: NTB scanpix / Norway Today

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