The National Bank of Ukraine calls on Ukrainian MPs to back Draft Law No. 2456-d On Amendments to Certain Legal Acts of Ukraine in Respect of the Improvement of Protection of the Rights of Financial Services Consumers (hereinafter Draft Law No. 2456-d).
“European countries have made obvious progress in ensuring the rights and freedoms of citizens, particularly the rights of financial services consumers, and establishing a legal framework to safeguard these rights. Mechanisms have long been in place to protect these rights and freedoms. These mechanisms are enshrined in laws and regulations. Ukraine has just embarked on the path towards establishing a legal framework to protect the rights of financial services consumers. Draft Law No. 2456-d is a crucial step on this path,” said Director of the NBU Legal Department Mr Oleh Zamorskyi.
According to him, there is no specific legal framework to protect the rights of financial services consumers in Ukraine. These rights are only covered by the Law of Ukraine On Consumer Rights Protection. Specific requirements for disclosure of information about financial products and responsibility for violation of the rights of financial services consumers have not been established yet, thus leaving the users of financial services unprotected against unfair practices.
“We seek to establish a legal framework to regulate relations between individuals and banks and financial institutions in accordance with the best EU practices. The NBU believes that there are two ways to address this issue: 1) promote financial awareness among the public; and 2) enhance the legal protection of financial services consumers. These measures will help restore trust between counterparts to financial transactions. We are working on a broader educational program designed to raise financial awareness among the public. We hope that Draft Law No. 2456-d will soon be adopted by parliament. Our final goal is to make our citizens financially literate and capable of making sound financial decisions and investing their funds in various financial instruments. At the same time, financial services consumers will feel confident in the quality of services provided to them and that their rights will not be violated,” said Mr Zamorskyi.
Draft Law No. 2456-d is primarily intended to address gaps and inconsistencies in laws and regulations on consumer rights protection. Such legal shortcomings lead to confusion and inappropriate application of legal norms by the judicial system.
This draft law, inter alia, imposes a level playing field for banks and non-bank financial institutions and sets out equal requirements for advertising of services and disclosure of information.
Draft Law No. 2456-d shall entitle the NBU to determine the minimum information that banks and non-bank financial institutions are required to provide to consumers in cases that are not covered by applicable laws.
As a side note, Draft Law No. 2456-d is one of the draft laws is stipulated by the Comprehensive Program of Ukrainian Financial Sector Development Until 2020. This draft law was registered on 29 December 2015.
For reference
Apart from Draft Law No. 2456-d, the protection of the rights of financial services consumers is covered by several other draft laws. Draft Law No. 2455 On Consumer Lending is another important bill that specifies provisions regarding the protection of the rights of financial services consumers.
Draft Law No. 2455 is intended to protect the legal rights of both consumers and lenders. This draft law is designed to protect financial services consumers against violation of their rights by providing the latter with information required for decision making and to strengthen the responsibility of financial institutions for violation of the rights of their customers.
Twenty-six draft laws required for advancing financial sector reforms are pending approval by parliament. The draft laws pertaining to the protection of creditors and financial services consumers' rights, financial restructuring of corporate debts, consolidation of the state regulation of financial services markets functions, as well as anti-money laundering draft laws are crucial for moving forward financial sector reforms and promoting financial sector development.