Cyprus parliament passes new legislation regarding loan foreclosures and borrower protection

On Monday, the Cyprus House of Representatives approved a comprehensive legislative package involving two government bills and several legislative proposals concerning loans and foreclosures. The first government bill, amending the law on the Financial Ombudsman, passed with 32 votes in favor, 18 against, and one abstention. The second bill, regarding the transfer and mortgaging of real estate, passed with 37 votes in favor and 15 against. These laws strengthen the Financial Ombudsman's role, making decisions binding for disputes up to €20,000, though banks retain the right to appeal to court. Borrowers can now seek assistance upon receiving a 'Type I' letter, and personal repayment plans via insolvency practitioners are introduced as a last resort to protect primary residences. A proposal by DEPA to suspend primary home foreclosures faced opposition from the Ministry of Finance due to fiscal risks. Meanwhile, AKEL requested the postponement of its own legislative proposal concerning unfair bank terms to be reviewed by the next parliament. Legal authorities had previously warned that some legislative proposals risked being unconstitutional by interfering with judicial powers.