Cyprus government proposes bills to strengthen financial ombudsman

On Monday, Cypriot Finance Minister Makis Keravnos announced the approval of two government bills by the Council of Ministers aimed at strengthening the role of the Financial Ombudsman and protecting primary residences. These bills, which will be sent to the Legal Service for technical review before being submitted to Parliament, seek to upgrade the debt verification mechanism. A key provision allows borrowers to approach the Financial Ombudsman earlier, specifically upon receipt of a Type I letter instead of the current Type IA letter. This adjustment provides both the borrower and the Ombudsman more time to negotiate and reach a debt restructuring agreement. Additionally, the process will involve insolvency practitioners to facilitate settlements between borrowers, banks, and credit acquisition companies. If parties fail to reach an agreement on restructuring or repayment, further options will be available under the new framework. This initiative is presented by the government as a way to provide sustainable solutions for all involved parties regarding foreclosures.