The AEBU union proposes that housing loans and the absorption of Banco Hipotecario by BROU be treated separately
The Association of Bank Employees of Uruguay (AEBU) prepared a report in which it questions the bill sent by the Ministry of Economy and Finance to Parliament to address the situation of debtors in Adjustable Units (UR) of the Mortgage Bank (BHU). and the National Housing Agency (ANV).
Initiative in which the Executive Branch proposes toIn addition, the BHU is absorbed by Banco República.
Along these lines, AEBU states in the document that the two initiatives promoted by the same bill would be “advisable” if they were treated separately, “since they are highly relevant and have characteristics that make it difficult to treat them together.”
“We do not consider the merger of both banks necessary or convenient, whose roles are very different. It is essential to understand what is the strategy or vision that is held towards the future with respect to the role that state banks are going to play in housing policy. It is relevant to highlight that the economic and financial situation of the BHU is solid and that in its segment of activity it is the bank with the largest market share”, the union points out.
Despite the fact that the bill that entered Parliament clarifies that the officials linked to the BHU “will become dependent on the BROU and “will continue to enjoy the status of officials of the official bank, maintaining” the rights and benefits acquired”, the union recalls that “they remain some undefined aspects regarding the transfer of workers from one institution to another”.
Although the need to find a solution for debtors is shared, AEBU understands that what is proposed by the Executive Branch “implies great inequities even within the group of debtors that it is intended to help.”
In turn, it is pointed out that no compensation to the BHU is foreseen, nor is there “a clear estimate of the economic cost, its financing and the impact on public finances”.
On the other hand, AEBU highlights the historical social role that the BHU has had as a housing policy agent, but that it “has been in the background for years due to decisions of the different governments that have led it to focus on its commercial role and in direct competition with private banks for the mortgage credit market”.
“The merger of both banks implies deepening the orientation of the real estate credit market to the detriment of the articulation with the housing policy, this is related to the mortgage foreclosure mechanisms, regulatory aspects and differences in legal matters that exist between the portfolios of the BROU and the BHU”, is stated in the document, which insists on the idea that the institution fulfills a role of social inclusion.
“Since social inclusion is a central aspect to achieve higher levels of development, official banks have a fundamental role to play linked to financial inclusion and the democratization of the financing tools to which the population has access. Therefore, within this role of the State bank as a whole, the place occupied by the BHU is key, since access to housing is one of the central points for achieving higher levels of development and social inclusion. The BHU has been operating since its 2007 restructuring as one more commercial bank, but oriented solely to the credit market. In this scenario, although private banking has gained ground significantly in recent years, the BHU continues to be the market leader with a proportion of approximately 50% of housing loans”, it adds.
Debtors in Readjustable Units
Regarding the MEF’s proposal, AEBU points out that the solution proposed by the portfolio that covers a third of the BHU’s debtor portfolio “will have a significant impact on the bank’s economic and financial situation.”
“Among other considerations that can be made from the proposed measure, one of them is that it implies unequal treatment among debtors. Not with the debtors who are not included in the project, but within the group itself to which a solution is proposed. As it is a ‘sweeping’ measure, this means that there are very different situations that will be treated in the same way. A serious and responsible approach to the political system that affects contracts must ensure certainty for all parties: this project does not do so, because it treats different realities in a homogeneous way, committing injustices among the beneficiaries, and at the same time not having planned a financing”, questions the analysis, which also demands an economic counterpart for the BHU in the event of the cancellation of mortgage debts.
