Cyprus MEP Demands Banks Protect Vulnerable Borrowers' Homes

Cyprus MEP Michalis Hadjipantela is urging banks to protect the homes of vulnerable borrowers who have already repaid a substantial part of their mortgage. He sent a letter to the Association of Cyprus Banks, the Central Bank of Cyprus, and the European Central Bank asking them to consider provisions backed by the European Parliament earlier this year.

The provisions call for greater protection of first homes, particularly for vulnerable households. According to Politis, Hadjipantela is asking banks to take these provisions into account when dealing with borrowers who have remained consistent with their repayments.

Cyprus has struggled with high levels of non-performing loans and the issue of foreclosures has been politically sensitive for years. The European Parliament's Banking Union report for 2025, on which Hadjipantela served as shadow rapporteur for the European People's Party, urged member states to ensure adequate protection of primary residences.

Hadjipantela is asking banks operating in Cyprus to turn these recommendations into clear and transparent practices while maintaining proper risk management and financial discipline. He wants information on how banks assess whether a borrower is vulnerable, how much weight is given to the proportion of the loan already repaid, and whether foreclosure decisions take account of a customer's payment record and genuine efforts to meet their obligations.

Cyprus has been trying to strengthen its own protections, with new safeguards aimed at giving the Financial Commissioner a greater role in debt disputes. The European Parliament report also calls for banks to refrain from unfair contractual terms and commercial practices, particularly in mortgage and retail lending.