UFC-Que Choisir launches Wednesday, December 16 an alert against “irresponsible distribution” consumer credit by banking establishments. Unreimbursed loans could exceed 12 billion euros in 2021, according to estimates by the consumers’ association. Jean-Louis Kiehl, president of the Croesus association, a national network for the fight against over-indebtedness, fears a “leap into the unknown” if banks and lending institutions do not make a gesture towards households.
franceinfo: Does the number of consumer loans surprise you?
Jean-Louis Kiehl: There was an explosion, a resumption of consumption with deconfinement. It is a catch-up and we are heading into the unknown: unemployment will lead to situations of over-indebtedness. Postponements of institutions [bancaires et financiers] during the first wave of confinement, they will have to be paid. We must look for a more comprehensive solution. All the players must come together so that everyone can find a solution that is gentle on households, by lowering interest rates or extending maturities, which we do with companies or States.
Less than a third of households in difficulty have recourse to solutions against over-indebtedness. Why ?
Households do not dare to do it. We have a cultural problem in France about the relationship to money. Institutions should be encouraged to communicate. The grace period allows the deadline to be extended by one or two years and it is still too little used. You should not be afraid to file an over-indebtedness file. We are all fragile. There are the most precarious, like the young, who are struck first. ‘Small jobs’ are becoming scarce. Retirees and the middle class are also affected. Home loans can also be the cause of defaults, it could lead to a much worse crisis than the subprime mortgage crisis.
Are banks paying sufficient attention to the financial situation of borrowers?
Banks have the option of checking creditworthiness in accounts held at institutions. But for small loans, one can make the loan too. We have to be more responsible. Today is the moment of truth, despite the compensation measures decided by the government, such as short-time working and the guarantee fund for companies. Furthermore, we should not ban advertising around these risky loans, but educate each of us. We must finally unite the banks around the Ministry of the Economy. Today, we still have time to react, before the situation becomes complicated, it will certainly be in March.
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