Title: Legal Aspects and Developments for Financial Consumer Protection: Evidence from the Romanian Banking System
Abstract: ABSTRACT.Increasing number of consumers of financial products and services, rapid technological developments and financial innovations are among the factors that impose strengthening financial consumer protection. The global economic and financial crisis, that revealed several weaknesses in the regulatory framework for financial activity, also underlined the need to strengthen the financial consumer protection framework. Therefore, currently, efforts are being made in this direction by improving the legal framework for financial consumer protection or developing programs for financial education. Against this background, the paper presents some legal aspects and developments for financial consumer protection with focus on the Romanian banking system.Keywords: financial consumer protection; legal framework for consumer protection; Romanian banking sector1. IntroductionStrengthening financial consumer protection is an issue that gained importance alongside with consumer number increase and complexity of financial products and services.Therefore, currently, strengthening financial consumer protection is on the agenda of several national and international bodies: the Group of Twenty (G20), the Financial Stability Board (FSB), the Organization for Economic Cooperation and Development (OECD), the World Bank etc. organizations also play an important role in promoting the rights of consumer of financial products and services.However, financial consumer protection is weak both in countries with developed, well-established financial sector and countries with less mature and developed financial sector (Consumers International, 2011).2. International Developments on Financial ProtectionIn 1985 the United Nations (UN) adopted the United Nations Guidelines for (UNGCP), document that underlined the basic consumer rights and served as reference point in designing the legal framework for consumer protection across the world (UN, 2003).Even if the existing Guidelines are still valid, in 2012, the UNCTAD triggered the revision process of the UN Guidelines for Protection. As indicated by the UNCTAD, financial services are among the new issues that the UNGCP revised document has to address (UNCTAD, 2012).Protection of consumers and financial stability are major objectives of traditional regulatory and supervisory framework. However, the recent developments that affected market for financial services also require dedicated policy action for financial consumer protection (OECD, 2011).In February 2011, the G20 Finance Ministers and Central Bank Governors called for the OECD, the FSB and other international organisations to develop principles on financial consumer protection. The result of this call was the documents titled G 20 High-level Principles on Financial Protection issued in October 2011 (OECD, 2011).The FSB document Consumer Finance with particular focus on (FSB, 2011) was another response to the international call for enhancing consumer financial protection. According to this report, consumer protection authorities, responsible lending practices and product intervention are among the FSB members' options for enhancing financial consumer protection (FSB, 2011).At the European level, several European Union (EU) Directives on financial consumer protection were adopted. The directive on credit agreements for consumers has a particular importance (Directive 2008/48/EC). On 28 January 2014, the Council of the European Union adopted a directive on mortgage credits (Council of the European Union, 2014). The two directives aim to improve the protection of the European credit consumer.Enhancing consumer protection across the UE is also achieved through the network of European Centres.Consumers International is an international organization founded in 1960 that has over 240 member organisations in 120 countries. …
Publication Year: 2014
Publication Date: 2014-01-01
Language: en
Type: article
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Cited By Count: 3
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