Austrian Financial Market Authority Updates Building Society Act Ordinance

Key Takeaways

• The Austrian Financial Market Authority (FMA) has issued an update to the Building Society Act Ordinance regarding loan limits and contract transfer protocols.
• This regulation introduces specific thresholds for building society loans and establishes new calculation methods for the building society protection fund.

Deep Dive

This regulatory update modifies the maximum allowable sum of building society loans that can be obtained by a single saver. While the current limit is set at EUR 300,000, the ordinance includes an inflation-adjustment mechanism tied to the "Tariff Wage Index 2016" (TLI 2016) published by Statistics Austria. Compliance teams must ensure that internal systems are capable of adjusting these limits automatically based on the index values provided in Appendix 1.

The regulation also introduces specific oversight requirements for "large building savings contracts," defined as those with loan amounts exceeding EUR 600,000. There are strict concentration limits imposed on building societies: unallocated large contracts cannot exceed 10% of the total unallocated contract amount, and the proportion of such contracts concluded within a single calendar year must not exceed 5% of the total annual contract volume. Compliance monitoring must be enhanced to track these exposure ratios in real-time to prevent regulatory breaches.

Furthermore, the update clarifies the conditions for the transfer of building savings contracts, particularly in the context of major construction projects and transfers to direct relatives or spouses (including marriage-like communities with six months of shared residence). The rules regarding loans without collateral are also capped at EUR 45,000, subject to index-based adjustments.

For compliance professionals, the primary recommendation is to perform a gap analysis on existing loan origination and monitoring systems. It is critical to verify that the logic for calculating maximum allowable loan amounts and the reporting of contract proportions aligns with the new statutory formulas. Failure to accurately monitor these thresholds could lead to capital adequacy issues or breaches in consumer protection standards regarding lending limits.

Source: Austrian Financial Market Authority