Opinion of the European Central Bank of 22 February 2016 on further amendments with respect to responsible lending requirements (CON/2016/8)
Date: 2016-02-22
Institutions: European Central Bank
Subjects: Hungary, consumer credit, economic value, financial stability, income, loan, payment

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 22 February 2016 

on further amendments with respect to responsible lending requirements 

(CON/2016/8) 

Introduction and legal basis 

On 23 December 2015, the European Central Bank (ECB) received a request from the Magyar Nemzeti 

Bank  (MNB)  for  an  opinion  on  a  draft  MNB  decree  (hereinafter  the  ‘draft  decree’)  amending  MNB 

Decree 32/2014 (IX.10.) regulating the payment-to-income and loan-to-value ratios permitted in respect of 

consumer credit transactions. 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the sixth indent of Article 2(1) of Council Decision 98/415/EC 1, as 

the draft decree relates to rules applicable to financial institutions insofar as they materially influence the 

stability  of  financial  institutions  and  markets.  In  accordance  with  the  first  sentence  of  Article  17.5  of  the 

Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the draft decree 

1.1  The draft decree amends MNB Decree 32/2014 regulating the payment-to-income (PTI) and loan-

to-value (LTV) ratios permitted in respect of consumer credit transactions. The ECB was consulted 
and  issued  an  Opinion  on  the  draft  of  that  decree  on  23  June  20142.  MNB  Decree  32/2014 

introduced caps on the PTI and LTV ratios used to establish the creditworthiness of consumers and 

their capacity to withstand adverse shocks due to exchange and interest rate movements. 

1.2  As  noted  in  the  explanatory  memorandum,  the  draft  decree  aims  to  ensure  a  smoother  lending 

process  and  eliminate  technical  difficulties  that  financial  institutions  or  borrowers  might  currently 

face. The new measures are expected to enter into force on 1 March 2016. 

1.3  The main changes introduced by the draft decree concern certain specific exemptions from the use 

of the caps in respect of the PTI and LTV ratios. In addition, a lower weighting is proposed for the 

PTI  ratio  with  respect  to  the  regular  instalments  of mortgages  with  longer-term  fixed  interest  rate 

periods.  Some  technical  clarifications  on  the  sources  of  certified  net  income  and  the  definition  of 

payment accounts are also made. 

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Council  Decision  98/415/EC  of  29  June  1998  on  the  consultation  of  the  European  Central  Bank  by  national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 

Opinion CON/2014/44. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 

 
 
 
 
 
                                                 
ECB-PUBLIC 

2. 

General observations 

From a financial stability perspective, the ECB welcomes the measures of the draft decree to the extent 

that they aim at promoting responsible borrowing and lending, enforcing market discipline, reducing credit 

risk and increasing the transparency of credit institutions’ activities. The ECB underlines the importance of 

a  thorough  quantitative  impact  assessment  to  verify  the  effect  and  appropriateness  of  the  proposed 

amendments, as well as the regular review of the PTI and LTV ratios to take into account the implications 

of  changes  in  macroeconomic  and  financial  conditions.  The  scale  of  exemptions  from  the  scope  or 

specific  provisions  of  MNB  Decree 32/2014  should  be  proportionate  to  the  overall  objective  to  be 

achieved, which is to curb excessive lending to households and prevent over-indebtedness. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 22 February 2016. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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