Steinbrück wants to prohibit usury at dispo interest rates by law
April 13, 2018
Berlin – SPD candidate for chancellor Peer Steinbrück wants to prohibit excessive dispo interest rates in a red-green election victory by law. “Although the banks at the European Central Bank can currently lend as cheaply as ever for just 0.75 percent, they charge up to 15 percent interest on a simple overdraft.” This is usury, “said Steinbrück told the” Bild “newspaper ,
The SPD wants to allow only dispo interest rates of a maximum of eight percent. A Federal Council initiative initiated by the Green-Red government in Baden-Württemberg failed in the autumn on the EU-led countries – even the SPD parliamentary group could not enforce such a proposal so far.
“The interest rates for overdrafts in Germany are on average almost 12 percent among the highest in Europe,” the SPD emphasizes in a proposal to limit usurious interest rates. Only in the crisis countries of Greece, Ireland and Portugal are currently even more expensive. According to surveys, almost one third of Germans use the overdraft facility. Many medium-sized companies rely on the use of credit facilities, because more and more often customers did not pay their bills on time.
Maximum 8 percent surcharge on the base rate
“That’s why we are calling for a legal regulation, according to which there may be a maximum of 8 percentage points on the base rate of the Bundesbank, to which the credit institutions can refinance,” says the paper, which is the German Press Agency. The banks in Germany still have not learned. Millions of Germans would still have to pay horrendous interest on their overdrafts.
Federal Consumer Protection Minister Ilse Aigner (CSU) had repeatedly argued against a legal cap. This even carries the risk that it will be more expensive for all customers – for example, if so far cheaper banks exhausted the limit. On the other hand, the consumer centers also demand a fixed upper limit.
Baden-Wuerttemberg Minister of Economic Affairs Nils Schmid (SPD) emphasized: “All previous voluntary measures have not been successful, so the legislator must take action and set a cap”.
The left-wing politician Sahra Wagenknecht supported the proposal for a legal regulation. “With the push to combat usurious interest Peer Steinbrück makes it clear that a common policy of the SPD and the Left for the benefit of the people in this country is possible.” The left calls for the limitation of discretionary interest to only five instead of eight percentage points above the base rate.
The German banking industry rejected Steinbrück’s proposal against it. “The intense competition among banks and savings banks leads in Germany to market-oriented interest rates,” it said. Thus, the discretionary interest has fallen since mid-2008 by almost 20 percent.