Cyprus parliamentary committee reviews proposed changes to foreclosure framework

The House Committee on Financial and Budgetary Affairs is reviewing proposed legislative amendments regarding the foreclosure framework and the management of non-performing loans (NPLs). The Association of Cyprus Banks submitted a memorandum warning that these changes could negatively impact credit institutions and the financial stability of the economy. The Association argues that modifying foreclosure procedures may extend liquidation timelines and jeopardize the country's credit rating. Currently, the legal framework allows debtors to seek court injunctions or appeal to the Financial Ombudsman regarding abusive clauses and charges. The Association maintains that the existing system already provides sufficient protection for borrowers. Furthermore, they emphasize that high private debt remains a primary economic challenge identified by international institutions like the IMF and the European Commission. The banks claim that most problematic loans are long-standing debts already under judicial review, and further legislative interventions could render the foreclosure process ineffective.