This is news that will appeal to borrowers but certainly not to lending institutions: to take out a mortgage, it will no longer be mandatory to domicile his income at the bank or lending institution . Explanations.
Bank domiciliation, the plague for borrowers
Until now, to grant a mortgage, the banks were forcing their new customers to transfer their income to their institution. This practice is at the limit of the forced sale , if not considered as an unfair term. An order of 1 June 2017 had already taken place to supervise the domiciliation of income.
Since January 1, 2018, if the institution imposes bank domiciliation, it must mention it and offer, in return, a clear advantage, such as a lower rate. In addition, the obligation must be limited to a maximum of 10 years. Beyond that, the borrower can change banks without his loan contract being challenged.
The end of bank domiciliation for real estate loans
An amendment to the law PACTE (Growth and Transformation of Enterprises) adopted in first reading by the National Assembly on Saturday, March 14, 2019 puts an end to the possibility for bankers to impose the banking domiciliation of income to their customers in return for a home loan. It ratifies 26 ordinances, including the one of June 1, 2017 relating to the offers of mortgage loan. Subject to final adoption of the law, the voted amendment will be applied from June 2019 .
The purpose of this amendment, proposed by the majority MP Coralie Dubost, combines commercial negotiation with the possibility of bank domiciliation and should facilitate banking mobility. The obligation of bank domiciliation was in complete contradiction with the European principle of free movement of goods and services .
Banks not at all satisfied
However, the banks see in this amendment an unjustified attack against a little used practice. According to some, the domiciliation of income would be practiced only in one mortgage out of three. That said, it was for the banks, through this practice, to find ways to retain their borrowing customers , while facing the competition increasingly fierce online banking.
Some bankers even go so far as to say that this is a step backwards, before the 2017 ordinance comes into effect. This is however a recommendation of the CCSF financial sector) made to the government through a report at the end of January . Corinne Dromer, the president of the CCSF, pointed out that the clauses making the banking domiciliation mandatory had already, since 2004, been considered by the commission of unfair terms as unsuitable. But in trying to remove uncertainties, the order only legitimized these practices . If the counterparty is most of the time an advantage over the rate, it does not appear clearly verified as the rates are low.