A bill to reform the HCSF
At the end of January, MP Lionel Causse tabled a bill (n°2091) aimed at reforming the High Financial Stability Council (HCSF) with 2 major proposals:
– “Modify the composition of the High Financial Stability Council, in order to include a deputy and a senator, respectively designated by the President or the President of their chamber”
– “ Facilitate access to credit for people not at risk of excessive debt » by allowing “lending institutions to exempt themselves from the effort rate rule when they are able to demonstrate that the loans concerned do not present a risk of excessive debt”
Examined by the Finance Committee of the National Assembly on April 10, it had already been modified, notably following opposition from the Banque de France. Yesterday, after several hours of debate in public session at the National Assembly, the MP preferred to withdraw his proposed law, considering it distorted and emptied of its substance. There will therefore be no reform of the HCSF.
No reform of the HCSF: real consequences on credit production which remains lower than 2023
“ We supported this bill and strongly regret its withdrawal and the inaction that will result from it. Indeed, reforming the HCSF and allowing banks to freely assess risk in granting their loans, particularly with regard to the remainder of life, could have allowed a rebound in credit production, particularly on the part of investors and first-time buyers.while of course ensuring that you maintain a reasonable level of debt » explains Julie Bachet.
Indeed, the adjustments to the HCSF recommendations decided in mid-end of 2023 had allowed banks to grant more loans within their margin of flexibility which was under-exploited, demonstrating a need for financing outside of these criteria, particularly in a context of rising credit rates which weighs on debt. Indeed, the share of loans not in compliance with HCSF decisions had thus reached 15.9% of credit production in December 2023 compared to 13.6% in January 2023, for the benefit of investors: 18.5% of loans granted to investors were thus non-compliant with the effort rate criteria in December compared to 13.6% in May, an increase of 5 points in just 7 months. However, without these adjustments leading to an increase in over-indebtedness, the average effort rate having remained almost stable at 31% in December 2023 compared to 30.3% in January.
In this context, why not completely lift this constraint which still weighs on the granting of credit and leave banks free to assess risk? This bill could have made it possible in a context of timid market recovery.
“ Even if banks have been lending again since the end of 2023, we have moved from a banking supply problem to a demand problem. Credit production is currently lower than it was a year ago, while it was already lower than in 2022. Lifting the constraints put in place by the HCSF would allow a greater return from investors, but also from first-time buyers, two categories of borrowers who have been strongly penalized by these recommendations, with the consequence of an increase in tensions on the rental market but also a fall in demand for new properties, with the economic and social impacts that we are seeing today among developers.. » explains Julie Bachet.
“ Completely lifting this constraint which weighs on the granting of credit and leaving banks free to assess risk would have been one of the solutions to revive demand and the entire sector by allowing, for example, more credit to be granted to investors, to integrate energy renovation work at the time of subscribing to the loan, and by allowing first-time buyers to borrow at 3.5% knowing that they will undoubtedly be able to renegotiate their credit in a few months and thus reduce their debt… » she concludes.
