Monday, April 15, 2024

Estwick: Be more creative


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More innovative monetary policies are needed in order to overcome the effects of the economic crisis on credit conditions, says Minister of Economic Affairs Dr David Estwick.
Policy measures, he thinks, need to be initiated to improve the functioning of credit markets and to increase the supply of credit to households and businesses.
Estwick was speaking yesterday at the Amaryllis Beach Resort during the opening of a Regional Seminar On Banking, Credit, FinancialServices And Consumer Protection In The Caribbean.
“A policy strategy is needed to allow for credit ease that will empower consumers and end unfriendly practices by financial service providers.”
Negative effects
The minister said that “innovative and imaginative systems” needed to be implemented to reduce the negative effects of the “sometimes draconian measures that are visited on consumers who access financial goods and services especially in times of recession”.
Estwick added that financial prudence should govern lending policies which would allow for the protection of consumers from themselves. 
He said such a practice would prevent them from exposing themselves to financial stresses in the long run.
The minister noted that consumers should be protected from credit fraud and that the onus should be on the financial entity to ensure that this does not happen.
Furthermore, in the event that the negligence cannot be attributed to the consumer, the financial institution should be obligated to ensure that the consumer recovers his losses without incurring any expenses, he said.
Statutory right
“It is hoped that in your deliberations, thought will be given to the development and implementation of a mechanism which would confer a statutory right that permits the consumer to reject indiscriminate interest rates which would then enable them to settle existing debts at the original rates of interest,” Estwick added.
He noted that consideration should also be given to the feasibility of preventing institutions from randomly increasing the interest rates they charge. 
“Additionally, one’s credit limit should not be increased without consultation particularly at times when one is finding it difficult to make ends meet,” he suggested.
“For the consumer to be in control and to be better able to keep track of his finances, there is need for new regulations and guidelines . . . which provide for the passage of a specific period of time before which consumers are offered a new credit facility,” Estwick said. (NB)


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