1. Kåre Lilleholt, University of Oslo Consumer credit and responsible lending in Norway

2. Consumer loans Loans taken by consumers, irrespective of purpose Mainly non-secured loans –but mortgage loans for other purposes than acquisition of the property are common Loans for extremely short periods and other consumer loans Credit cards, overdraft facilities etc. –not dealt with here, but may serve the same purposes

3. Legislation and supervision EEA agreement and EU rules –free movement of capital and freedoms of establishment –requirement of license; supervision –credit institutions with Norwegian branches and subsidiaries –cross-border consumer credit? Financial Contracts Act Rules on unfair terms etc. Marketing Act

4. Loans for extremely short periods Folkia AS (Monetti) –Credit period 30 days –NOK 1000–5000 (EUR 125–625) –APR up to 9245

5. Other consumer loans Example Bank Norwegian –Credit period one year or more –NOK 5000–400 000 (EUR 625–50 000) –Nominal interest rate 8,99–21,44 Other banks Intermediaries

6. Financial Contracts Act Also implementing Directive 2008/48 Advertising Pre-contractual information Duty to explain Duty to warn Formal requirements

7. Procedures, exemplified by Folkia AS Advertising (dir. art. 4) –amount, period, credit costs (representative example) on the Internet Pre-contractual information (dir. art. 5) –“in good time”, contract details, on paper or other durable medium; but exceptions for voice telephony communication Assessment of creditworthiness (dir. art. 8) –credit information agencies –no credit database

8. ctd. procedures Explanations to the consumer (dir. art. 5(6)) –by phone? Warning against taking up the loan –written and, if possible, verbally –written confirmation by consumer –breach may lead to adjustment of the consumer’s obligations

9. ctd. procedures Written agreement (dir. 10) –use of electronic medium is allowed –the contract must be available –secure method of authentication –current dispute with the Consumer Ombudsman Returning customers –are offered “SMS loans” –overdraft facility? –current dispute with the Consumer Ombudsman

10. Formation of Contracts Act Contracts void for usury? –not applied in practice General clause on unfair terms –mostly a question of sufficient information

11. Marketing Act Control of marketing Control of terms in standard contracts Both by the Consumer Ombudsman

12. Responsible lending and over- indebtedness No financial crisis – so far –employment numbers –bankruptcies –debt recovery Requirements for owner’s capital Capital requirements for banks Housing bubble? Duty to warn against credit seems to be of small practical relevance