Now that winter has set in and the ski season is in full swing, there are certainly many Norwegians sitting in front of TV, crossing their fingers and thinking nostalgically back to Bluntland’s famous quote “It’s typically Norwegian to be good”. The confidence of the Norwegian athletes may have been somewhat weakened due to Johaug’s exclusion and the fact that the handball girls are no longer as clear winners. However, Bluntland did not just talk about athletes in her speech when she first came up with the well-known quote, and today it is not just the sports world that suggests that Olca and Kerry Norwegians should rather say that “it is typically Norwegian to have high consumer debt” . Consumption and credit card debt continues to increase in households in Norway, and now the government wants this to be registered in a new private register. There are both supporters and opponents to this, and you can read about it in this article.

 

We owe $ 100 billion

money loan

The fact that Norwegians have received larger mortgages is no surprise given the historically low interest rates. On the other hand, there is no immediate logical explanation for why Norwegians’ consumer debt rises by almost 10 per cent each year, when interest rates are usually stable high somewhere between 10 and 30 per cent. NRK wrote that consumer debt in Norway is as much as $ 100 billion, but yet there is no comprehensive overview of how much debt individuals have for consumer loans and credit cards. This is very worrying, especially among the young people, Consumer Minister Solveig Horne told iPold Finance. She further said that it is important to prevent more and more people from ending up in the luxury trap, and believes that a debt register can prevent more people from ending up in debt crisis. This is the reason why the government recently submitted a proposal on the Debt Register Act for consultation. They hope that with access to private individuals this can help more people manage their debt. The proposal deals with a new private debt register, which will only register unsecured consumer debt and credit card debt.

 

Right-of-way to the debt register

Right-of-way to the debt register

This is not the first time a proposal for a public debt register has been made, but the Sunberg government has voted it down on two occasions. Ap and Krf presented a proposal last year in connection with, among other things, the processing of the state budget. In addition, a proposal from the Stoltenberg 2 government was withdrawn when the Sunberg government took over in 2013. Torstein Tvedt Sunberg, who sits on the Finance Committee of the Labor Party, told iPold Finance that the government has sat and let the debt grow at a staggering rate. He said that they have now spent over three years promoting a debt proposal consultation, and that he thinks is hair-raising. According to Sunberg, the smartest solution is a public register where the data can be controlled, which is called for by the Data Inspectorate and the industry. Storting politician Karrie Lorden from the Right told NRK that they have always been opponents of the debt register in the party. They have taken this stance on the basis that it turns out that the countries that have introduced this solution still do not prevent people from becoming economically disadvantaged. They also believe in other solutions such as interest rates on the most extreme credit cards and that the financial institutions themselves have to impose stricter requirements on documentation from loan applicants. Prime Minister Horne has admitted that it has taken quite a long time to get a debt register in place, but wants in the proposal to open for private actors to manage it, as is done in several other countries. The Consumer Council has previously said that it was a mistake of the government to withdraw the proposal for a public debt register. George Jansen, the director of finance at the Consumer Council, will nevertheless not criticize the fact that it has taken so long. Instead, he says to NRK that the most important thing now is to just have a register in place so consumers can go in and check their own debt.

 

We hang around a bit for the neighbors

There is nothing new with public debt registers, so it can probably be said that Norway is a bit slow on the field here. All 17 European countries already have this in place, so consumers have a right of access in their own debt situation. In addition to being a tool to prevent too many ending up in debt crisis, it can also prevent fraud in the name of others. Unfortunately, it has become a widespread problem that fraudsters manage to take out loans and spend money in the name of others. One of the factors that enables people to scam in this way is that the lender companies have a lack of good contemporary data on loan applicants. With a debt register, the creditors could, among other things, gain access to how many times they had applied for a loan. George puts forward this as a good argument for why he hopes the debt register will be implemented as he says the government has now promised.

 

Deadline before Christmas

Deadline before Christmas

The proposal has now been submitted for consultation by the government with a deadline in December. The goal now is to promote a bill for the Storting this spring. Although a debt register cannot save everyone from financial disabilities, it will probably be a measure that in any case cannot aggravate the debt situation and most likely help many. Darrel Lings wrote this week that brokerage houses are now cutting down forecasts for the Norwegian economy after the interest rate meeting last week in Ponges Bank. As expected, the key policy rate remained unchanged at 0.50 per cent. For the first time, the central bank included the risk of financial instability directly into the interest rate path and shared that the main reason for keeping interest rates unchanged was the concern for strong house price growth and high household debt. As you could read about in the previous article, the housing market in 2016 has exceeded everyone’s expectations . The high consumer debt may be a sign that many have to borrow money to maintain a certain lifestyle, so good New Year’s resolutions may include looking closely at the economy to see how much interest rate rises one can tolerate before taking action.