Taiwan's Financial Supervisory Commission convenes banks and shouts "No restrictions on lending" to open the mortgage Faucet: banks cannot refuse the public based on Article 72-2 of the Banking Act.
The Financial Supervisory Commission (FSC) has required banks not to further contract housing loans based on Article 72-2 of the Banking Act, and strictly prohibits the bundling of insurance policies with housing loans. State-owned banks are facing a dual challenge of deposit shortfalls and policy burdens. (Background: The Taiwanese housing market has exploded with "sky-high asking prices and flat transactions," with price cuts starting from 15%. Will it fall again next year?) (Additional background: The housing market in the coastal area of Taichung has reportedly "dropped below 30,000," with real estate agents wryly commenting that tenants can only afford a place to sleep.) Late last night, the FSC suddenly held a closed-door meeting with eight major state-owned banks to establish new regulations for the ongoing "housing loan crisis." The conclusion of the meeting was simple and clear: banks are no longer allowed to use Article 72-2 of the Banking Act as an excuse to refuse or delay loans for first-time buyers or owner-occupied housing, which also echoes Premier Su Tseng-chang's recent call for banks to "open the housing loan faucet" to address public grievances. However, sources within the banking industry have indicated that the FSC's actions are merely routine compliance and that the actual relief of housing loans may not be significant. Article 72-2 should not be used as a reason to refuse loans. Article 72-2 was originally intended to limit the amount of real estate lending by banks to within 30% of deposits and financial bonds, but it is generally set by Taiwanese banks at a cautionary line of around 28%. When approaching this line, banks tighten their limits and raise interest rates, slowing down the loan disbursement process to avoid triggering warnings from the Central Bank and the FSC while also retaining flexibility in their fund turnover. In response, the head of the Banking Bureau, Tong Zhengzhang, stated: "Article 72-2 cannot become a reason to restrict loans for self-occupancy and first-time buyers." During the meeting, Tong urged banks to "expand the denominator" by increasing deposits to bring the loan-to-deposit ratio back to a safe level, rather than directly closing the faucet. This statement serves both as a regulatory command and a reminder regarding traditional deposit and lending models: the supply gap for housing loans should first be addressed through sources of funding rather than shifting the risks onto homebuyers. The FSC has strengthened its review process: prohibiting bundling sales tactics. When interest rates rise and lending limits tighten, selling housing loan insurance often misleads borrowers into thinking that "without insurance, they will not receive funds." FSC Chairman Peng Jinlong proposed three key principles, one of which is to initiate financial inspections to identify any sales tactics suspected of bundling. Since 2023, financial inspections have already leaned towards consumer protection and risk management, and this ban is only formalizing the pressure. To reduce gray areas, the FSC has defined the "sales timing" more specifically: insurance cannot be sold during the loan review, contract signing, and information sessions; if customers wish to purchase insurance later, a separate signature is required. The regulatory authority has drawn a line between insurance policies and housing loans to ensure information symmetry. State-owned banks face a dilemma: deposit shortfalls versus policy burdens. Expanding the denominator sounds easy, but it tests state-owned banks. Despite being market leaders, state-owned banks often have higher funding costs than private competitors, lacking appeal for large deposits or postal savings. At the same time, new loan policies like the Qing'an Loan and favorable housing loans occupy a significant portion of their lending capacity, bringing them closer to the cautionary line in terms of housing loan ratios. Peng Jinlong emphasized: "Both state-owned and private banks must bear social responsibility and fully support first-time and owner-occupied housing needs." To improve transparency, the FSC will adopt a dual approach of financial inspections and information disclosure, including regularly publishing the real estate lending ratios and the proportion of policy-based housing loans for each bank, allowing the market to see who is genuinely implementing policies and who still uses Article 72-2 as a shield. Banking industry insiders have remarked: The effectiveness of government policy calls is limited and may not provide real help. Will the housing loan restrictions ease after this meeting? A lending officer from a state-owned bank indicated to the media that it may only have political significance in policy promotion, having little actual impact on the housing market, as the current issue is still "insufficient liquidity." Therefore, forcibly opening the faucet still results in a trickle of water, meaning that housing loans remain hard to obtain, let alone the new Qing'an loans supported by the government. Unless related provisions of the Banking Act are amended or the Central Bank breaks neutrality to support policies through monetary policy, there should not be more illusions. Rumors of the Central Bank's lending restrictions in the past seemed to indicate that once issued, the public could not obtain loans. In reality, this was a case of inverse causation; at the time, the housing market was indeed hot, and some cooperating banks faced tight risk controls and liquidity, while banks not cooperating with the Qing'an Loan still had liquidity remaining, leading to an uneven situation in policy compliance. After the lending restrictions were announced, banks without liquidity could only direct the public to banks with available quotas. The current problem is that there is no water; the main source of the housing loan liquidity should be the repayment of principal. Unless the Central Bank and relevant legislators cooperate to amend the law to increase liquidity to 32.5% or even 35%, banks are facing new Qing'an loan customers who do not need to repay the principal for five years. Customers who cooperate with the new Qing'an Loan will not start repaying principal until nearly 2028. Therefore, unless the law is amended or the Central Bank violates its independent professional standards to support policies through monetary policy, there is no short-term help for housing loan financing. Of course, do you think the FSC is unaware of the actual situation? They are government-appointed officials, and their primary objective is "to serve the people," which may differ from the perspectives of frontline banking personnel; political service may be more important, hence the holding of such a meaningless meeting. Related reports: Is the housing market on the verge of collapse? The sharp drop in Taiwanese stocks has led to a surge in "selling homes to save stocks," with endless calls for mortgage business. The housing market's Bitcoin "golden cross" has arrived! The prediction of a 20% further drop in housing prices: 2025 must see the eighth wave of housing market control, divided into two phases. Bitcoin and the housing market golden cross: KOLs in the crypto world buying in Taipei, TSMC engineers selling at a loss, construction starts hitting a five-year low. This article was originally published by BlockTempo, the most influential blockchain news media.
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Taiwan's Financial Supervisory Commission convenes banks and shouts "No restrictions on lending" to open the mortgage Faucet: banks cannot refuse the public based on Article 72-2 of the Banking Act.
The Financial Supervisory Commission (FSC) has required banks not to further contract housing loans based on Article 72-2 of the Banking Act, and strictly prohibits the bundling of insurance policies with housing loans. State-owned banks are facing a dual challenge of deposit shortfalls and policy burdens. (Background: The Taiwanese housing market has exploded with "sky-high asking prices and flat transactions," with price cuts starting from 15%. Will it fall again next year?) (Additional background: The housing market in the coastal area of Taichung has reportedly "dropped below 30,000," with real estate agents wryly commenting that tenants can only afford a place to sleep.) Late last night, the FSC suddenly held a closed-door meeting with eight major state-owned banks to establish new regulations for the ongoing "housing loan crisis." The conclusion of the meeting was simple and clear: banks are no longer allowed to use Article 72-2 of the Banking Act as an excuse to refuse or delay loans for first-time buyers or owner-occupied housing, which also echoes Premier Su Tseng-chang's recent call for banks to "open the housing loan faucet" to address public grievances. However, sources within the banking industry have indicated that the FSC's actions are merely routine compliance and that the actual relief of housing loans may not be significant. Article 72-2 should not be used as a reason to refuse loans. Article 72-2 was originally intended to limit the amount of real estate lending by banks to within 30% of deposits and financial bonds, but it is generally set by Taiwanese banks at a cautionary line of around 28%. When approaching this line, banks tighten their limits and raise interest rates, slowing down the loan disbursement process to avoid triggering warnings from the Central Bank and the FSC while also retaining flexibility in their fund turnover. In response, the head of the Banking Bureau, Tong Zhengzhang, stated: "Article 72-2 cannot become a reason to restrict loans for self-occupancy and first-time buyers." During the meeting, Tong urged banks to "expand the denominator" by increasing deposits to bring the loan-to-deposit ratio back to a safe level, rather than directly closing the faucet. This statement serves both as a regulatory command and a reminder regarding traditional deposit and lending models: the supply gap for housing loans should first be addressed through sources of funding rather than shifting the risks onto homebuyers. The FSC has strengthened its review process: prohibiting bundling sales tactics. When interest rates rise and lending limits tighten, selling housing loan insurance often misleads borrowers into thinking that "without insurance, they will not receive funds." FSC Chairman Peng Jinlong proposed three key principles, one of which is to initiate financial inspections to identify any sales tactics suspected of bundling. Since 2023, financial inspections have already leaned towards consumer protection and risk management, and this ban is only formalizing the pressure. To reduce gray areas, the FSC has defined the "sales timing" more specifically: insurance cannot be sold during the loan review, contract signing, and information sessions; if customers wish to purchase insurance later, a separate signature is required. The regulatory authority has drawn a line between insurance policies and housing loans to ensure information symmetry. State-owned banks face a dilemma: deposit shortfalls versus policy burdens. Expanding the denominator sounds easy, but it tests state-owned banks. Despite being market leaders, state-owned banks often have higher funding costs than private competitors, lacking appeal for large deposits or postal savings. At the same time, new loan policies like the Qing'an Loan and favorable housing loans occupy a significant portion of their lending capacity, bringing them closer to the cautionary line in terms of housing loan ratios. Peng Jinlong emphasized: "Both state-owned and private banks must bear social responsibility and fully support first-time and owner-occupied housing needs." To improve transparency, the FSC will adopt a dual approach of financial inspections and information disclosure, including regularly publishing the real estate lending ratios and the proportion of policy-based housing loans for each bank, allowing the market to see who is genuinely implementing policies and who still uses Article 72-2 as a shield. Banking industry insiders have remarked: The effectiveness of government policy calls is limited and may not provide real help. Will the housing loan restrictions ease after this meeting? A lending officer from a state-owned bank indicated to the media that it may only have political significance in policy promotion, having little actual impact on the housing market, as the current issue is still "insufficient liquidity." Therefore, forcibly opening the faucet still results in a trickle of water, meaning that housing loans remain hard to obtain, let alone the new Qing'an loans supported by the government. Unless related provisions of the Banking Act are amended or the Central Bank breaks neutrality to support policies through monetary policy, there should not be more illusions. Rumors of the Central Bank's lending restrictions in the past seemed to indicate that once issued, the public could not obtain loans. In reality, this was a case of inverse causation; at the time, the housing market was indeed hot, and some cooperating banks faced tight risk controls and liquidity, while banks not cooperating with the Qing'an Loan still had liquidity remaining, leading to an uneven situation in policy compliance. After the lending restrictions were announced, banks without liquidity could only direct the public to banks with available quotas. The current problem is that there is no water; the main source of the housing loan liquidity should be the repayment of principal. Unless the Central Bank and relevant legislators cooperate to amend the law to increase liquidity to 32.5% or even 35%, banks are facing new Qing'an loan customers who do not need to repay the principal for five years. Customers who cooperate with the new Qing'an Loan will not start repaying principal until nearly 2028. Therefore, unless the law is amended or the Central Bank violates its independent professional standards to support policies through monetary policy, there is no short-term help for housing loan financing. Of course, do you think the FSC is unaware of the actual situation? They are government-appointed officials, and their primary objective is "to serve the people," which may differ from the perspectives of frontline banking personnel; political service may be more important, hence the holding of such a meaningless meeting. Related reports: Is the housing market on the verge of collapse? The sharp drop in Taiwanese stocks has led to a surge in "selling homes to save stocks," with endless calls for mortgage business. The housing market's Bitcoin "golden cross" has arrived! The prediction of a 20% further drop in housing prices: 2025 must see the eighth wave of housing market control, divided into two phases. Bitcoin and the housing market golden cross: KOLs in the crypto world buying in Taipei, TSMC engineers selling at a loss, construction starts hitting a five-year low. This article was originally published by BlockTempo, the most influential blockchain news media.