Many bank check-ups wonder why their loan application was rejected. Laconic “you are in BIK, you have an entry in BIG” will not dispel any doubts. This will change soon.
And this is because the banks will be forced to explain to the client what exactly determined the refusal to grant the loan.
New law – full information
Why was I refused a loan? Why are my loan terms significantly different from those in the ad? To date, these were frequently asked questions of a potential borrower. The provisions of the Act implementing the GDPR are to spare these guesses.
What information do banks provide so far?
As Katrina Seina explains, who is the president of the Oneleader Foundation and fought for pro-consumer changes in banking law
“Until now, we only had general knowledge about how credit assessment goes. In a simplified way, we know that the bank is examining the history of the client’s liabilities, his current financial situation – whether he can afford to pay the installment at a given moment – and the risk that he will not repay the loan. “
In short, until now the bank has not informed its clients why it has refused to grant them a loan and which of the data provided by them excludes the possibility of taking out a loan.
One of the reasons for refusing a loan is an in-house customer assessment, which is often simply wrong. Considering that often customers gently changing their data to receive a loan, the next time they finally “shoot themselves” into the key and get the loan. This clearly means that something is wrong with the study of creditworthiness in banks. By not informing the potential borrower why his application has been rejected, he cannot rectify it and the bank loses the customer. “There are also times when incorrect information is processed in databases. The client may request a correction, but must know what it is about to apply,” says Katrina Seina.
What will banks have to inform about?
To meet borrowers, the government has proposed an amendment to the Banking Law, which will change the process of granting loans. The bank will be forced to explain its decision at the express request of the applicant. Regardless of whether it was positive or negative.
“For consumers who are interested in obtaining information on the basis of which information their creditworthiness was assessed, the procedure is free. Banks should not charge consumers also by increasing the cost of banking products themselves”
“The explanation itself should include factors that influenced the assessment of creditworthiness, including the customer’s personal data. For example, if a bank responds that income is a problem, it should state what amount it took into account in its analysis.”
Marnie Leiner, director of the Data Management Department of the Ministry of Digitization.
Will such changes bring positive effects?
I think so. After the changes, anyone who is dissatisfied with the bank’s decision will have insight into the real reasons for refusing a loan. As a result, you will be able to appeal against the bank’s decision or organize your financial situation in such a way as to receive this loan.
“Poland was the first to introduce the right to explain the decision for each applicant for a loan. Now we have to work out – together with banks – sensible procedures that will translate this law into practice,” says the president of Oneleader.
Of course, we will have to wait for these changes to enter into force, but this is a “milestone” in the possibility of granting a loan.