Enhance debt advisory services and restrict loan interest rates.

Hamburg: City in Germany - Enhance debt advisory services and restrict loan interest rates.

The city of Hamburg is advocating for enhanced debt counseling and clearly defined interest rate limits during the Consumer Protection Minister Conference scheduled for this Wednesday. Senator for Justice and Consumer Protection Anna Gallina (Greens) plans to present two resolutions at the event held in Regensburg, aiming to encourage the federal government to create a robust, reliable, and long-term solution for the existing network of over 1400 debt and insolvency counseling centers across the nation.

Gallina stated to the German Press Agency, "The cost of living has risen significantly lately, and the risk of falling into debt has increased as well." She emphasizes the necessity of expanding debt counseling and making it available to consumers who currently don't qualify for free or low-cost consultation. Furthermore, she believes that debt counseling requires a secure and future-proof funding model. The financial and collection economy should be incorporated in the financing plan.

Gallina also urges the federal government to implement measures to safeguard consumers from unfavorable contracts and exorbitant interest rates when obtaining loans. According to her, the revised version of the EU Consumer Credit Directive marked a significant breakthrough in strengthening consumer autonomy. The government should execute these measures faithfully.

The proposals from Hamburg suggest that fixed interest rate caps for loans need to be adjustable and tailored to specific products. The bank's margin ought to be aligned with its actual costs. Additionally, costs such as insurance and brokerage fees should be made more transparent.

Lastly, the resolutions request the ban on considering age as a sign of poor creditworthiness. Instead, the creditworthiness assessment should focus more on the individual's current income situation.

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1. The federal government, urged by Senator Anna Gallina from Hamburg, is encouraged to strengthen debt counseling services and establish a robust funding model to make these services accessible to all consumers.
2. The city of Hamburg proposes adjustable interest rate caps for loans and increased transparency in costs such as insurance and brokerage fees, with the bank's margin aligned with its actual costs.
3. Gallina emphasizes the importance of safeguarding consumers from unfavorable contracts and exorbitant interest rates, citing the EU Consumer Credit Directive as a significant step forward in this area.
4. At the Consumer Protection Minister Conference in Regensburg, Gallina will present two resolutions, aiming to persuade the federal government to take action and bolster the network of over 1400 debt and insolvency counseling centers across Germany.
5. The proposals from Hamburg also request the ban on considering age as a sign of poor creditworthiness and instead focusing on the individual's current income situation, which is believed to be a fairer assessment.
6. The German Press Agency reported on Gallina's stance, highlighting her concerns about the rising cost of living and increasing risk of indebtedness among consumers, which necessitates expanded and improved debt counseling services.

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