MPs will vote on Monday at first reading on a reform of the High Council for Financial Stability (HCSF), the objective of which is to modify the governance and operating rules of this body in order to facilitate the granting of real estate loans to households.
Supported by Bercy, but opposed by the Bank of France, the bill proposed by the Landes deputy Lionel Causse (Renaissance) was partly void of its substance during its passage in the finance committee.
Its examination comes at a time when the production of new housing loans fell to 7.3 billion euros in February, according to the Banque de France, the lowest in almost ten years. In particular, the cost of real estate loans, which however started to fall again in the first quarter, according to data from the CSA/Crdit Logement Observatory.
Conditions to limit household over-indebtedness
Created in 2013 by drawing lessons from the 2008-2011 financial crisis, the HCSF has established over the years a set of recommendations on real estate credit with the aim of limiting household over-indebtedness.
Banks therefore do not have the right to sign a real estate loan if the total amount of borrowers’ housing-related expenses exceeds 35% of their income (effort rate), nor for a period greater than 25 years, unless works represent 10% of the total amount of the operation.
These terminals can be bypassed in 20% of cases, provided that this primarily concerns main residences and targets, in almost a third of cases, first-time buyers.
Article 1 of the bill proposes to add two members to the High Council for Financial Stability which currently has eight, one from the Senate and the other from the Assembly, parity. The presence of parliamentarians would make it possible to stimulate public debate around the planned developments and to strengthen the democratic legitimacy of the measures taken, explained Lionel Causse to the finance committee.
An exemption called into question
Article 2 in its initial version offered the possibility to banking establishments to deviate from the HCSF standards in terms of credit granting conditions. An amendment from Lionel Causse adopted in committee ultimately maintains the effectiveness of the HCSF’s powers, while inviting it to provide greater reasons for its decisions and be more transparent to the public, summarizes the committee’s report.
The governor of the Bank of France, Franois Villeroy de Galhau, expressed his opposition to calling into question the HCSF or its criteria in mid-March, believing that this was in no way the subject, and emphasizing that the banks did not use not full of the flexibility allowed.
The problem with housing is that it is too expensive (…), this is what we must act on, said the president of the Finance Committee of the Assembly Eric Coquerel. (LFI).
Reproduction forbidden.