Borrowing money is bound by certain rules in most countries. These rules mainly relate to the lenders and concern, for example, the legal requirements that money advertisements or money offers must meet.In the not-too-distant past, any person or agency could borrow money from and to each other without any restrictions on the amount of money, the repayment terms and the amount to be calculated for borrowing. However, it soon became clear that many people got into trouble because they either borrowed too much or had difficulty paying off the loan because, for example, they became unemployed.
The government has since gradually developed legislation to ensure that certain population groups cannot borrow too much and that lenders cannot lend too much to consumers. The banking crisis of global financial institutions has collapsed and many citizens got into trouble. For example, it became clear that American banks had provided too much and excessive mortgage loans to consumers who had no way of paying it back. Too much credit has also been provided on the basis of insufficient collateral. As a result, both banks and consumers have run into major problems, causing a huge financial crisis worldwide and therefore an economic recession.
What is the Netherlands Authority for the Financial Markets (AFM)?
Due to the crisis, the Dutch government has further tightened policy. Borrowing money has therefore become more difficult in the Netherlands , but the risk that both the lender and the consumer run of getting into further financial problems has become much less. The role of supervisory or advisory bodies such as the Netherlands Authority for Financial Competition (AFM) and the Office for Credit Registration ( BKR ) has become larger and more important. A bank or other lender can still make the final decision itself to provide a credit to a consumer who does not fully meet all requirements, but a bank can ultimately be held liable by consumers if they act carelessly. There are plentiful examples, such as the debacle with the DSB bank, but the countless share lease constructions also turned out to have been sold incorrectly afterwards, as a result of which claims were submitted to the financial institutions via consumer organizations.
Borrowing money in the Netherlands is strict and certainly not easy at the moment, but there are solutions for every (financial) situation in which a consumer finds himself, more about this in the other articles.