In a number of regions, housing prices surged by more than 20%, even though households’ real incomes declined. As an anti-crisis measure, we also expanded opportunities for the so-called good mortgage loans with a small down payment. However, in the primary market, the portion of mortgage loans with a small down payment, which involve higher risks, increased from 24% in 2020 Q2 to 45% in 2021 Q1. This also reflects the observed trends and shows that the anti-crisis measures achieved their objectives and should be phased out. Otherwise, we might face the risks of ‘bubbles’ in this market. In turn, the Bank of Russia has already taken measures to prevent the materialisation of these risks — we have raised the so-called macroprudential buffers for mortgage loans with a down payment of 15% to 20%. However, if lending standards continue to lower (this is a trend we are observing) or housing price growth remains fast, we might not rule out the need to increase these buffers. Furthermore, unsecured consumer lending is also expanding, while households’ incomes are recovering much more slowly. This means that households’ debt burden is growing. It is crucial to prevent a situation where its level becomes hazardous. In this regard, we decided to raise the macroprudential buffers for consumer loans to the pre-pandemic level as well beginning on 1 July.
Signing a bank deposit agreement or a loan agreement or buying an insurance product, individuals should have comprehensive information on the conditions, expected returns, the full cost of all services, their rights and obligations. The issue of hard selling of services has also been discussed at the State Duma for many years. We are developing an instrument whereby key information documents on financial products disclose compact and clear data to consumers regarding all the conditions. We are also addressing the topic of hard selling of extra services and various fees when individuals sign 5/6  BIS central bankers' speeches  a consumer loan agreement. At the end of last year, we issued an information letter obliging banks to include such additional ‘services’ (only so-called services because they generally provide no benefits to people) into the calculation of the total cost of credit. I have said ‘an information letter obliging’, but there is a contradiction here since these are only recommendations and, accordingly, they cannot oblige anybody. We propose that organisations should specify the total cost of credit from the very start so that people understand the actual costs for loan servicing. This will enable people to select more advantageous offers. However, we certainly need legislative changes. Such amendments have been drafted with the engagement of the Central Bank. They propose the introduction of a so-called open-ended cooling-off period, which will enable consumers to fully abandon any services foisted on them together with a loan (with the refund of all related payments).