Tighten lending regulations or not?

October 05, 2022

Also:

  • 🙈 Bulder (Bank) no more?

  • 😶 The missing part of the process

🤔 Tighten lending regulations or not?

  • The maximum limit for the borrower's total debt when granting new loans from 5 to 4.5 times gross annual income.

  • Extend the regulation to include loans to consumers with mortgages other than housing, such as car loans.

  • Reduce the flexibility quota for new loans with housing mortgages from 10% to 5% for the whole country.

The central bank of Norway, Norges Bank, does not agree and believes that the current lending regulations should be continued but that a review should be carried out by 2024.

DNB, on their hand, wants to scrap the current regulation altogether because today's requirements mean that the banks have to say no to many young people who are perfectly capable of servicing a mortgage. They have Finance Norway on their side. The lending requirement that they are questioning is, however, that Norwegian banks must assume that their loan customers can cope with an interest rate increase of five percentage points on their mortgage.

The consumer council of Norway thinks it's a bad idea to scrap the regulations, and even worse timing to leave the responsibility of the lending regulations to the banks alone.

I am no economist and don't know what is best, but there sure is opening up a large market of actors helping people buy homes despite tight regulations and high prices. We've previously mentioned Adress and OBOS, but you also have new actors like Finit and Coowner.

🙈 Bulder (Bank) no more?

The Ministry of Finance in Norway has told Bulder Bank from Sparebanken Vest to make changes. They, together with the Supervisory Authority of Norway, believe that the digital service appears as a separate financial institution.

The Ministry of Finance refers to several examples where Bulder Bank uses words and phrases that are suitable to give the impression that Bulder Bank is an independent financial company. They point to marketing such as: "We at Bulder bank," "In Bulder we do not charge fees," "It costs nothing to use our card," and "We are building a bank from the ground up."

CEO of Sparebanken Vest, Jan Erik Kjerpseth, says that they envisioned this as a possible outcome and that there is no drama on their part. Sparebanken Vest will continue to invest in Bulder even if they have to make some adjustments to clarify who is behind it and consider if they should be called Bulder or continue with Bulder Bank.

You can read the full resolution here. The question remains what this resolution means for Nybygger, NORDirekte, and DIN Bank, and especially what DNB will do with Sbanken in the following months.

(Maybe Sparebanken Vest should change name to Spv so that they could rename Bulder Bank to "Bulder by Spv"? 😉)

😶 The missing part of the process

I came over to articles stating the same example: That too many designers are jumping too fast into Figma, which might mean they are missing out on an essential part of the process: experimentation.

I've never found Low-fi prototypes and wireframes working for me since they fall in the awkward state between a raw sketch and something that looks close to finished. But one thing I've experienced from working as a designer for over a decade is: People have different preferences for what process works for them. From my experience, you can get a long way by working mostly with hand sketches, Figma, and coding up simple prototypes. But that doesn't mean that it's not valuable trying out (new and old) things now and then!

That's it for this week 👋

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Marius Hauken, partner Stacc X