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Swiss banks seek heirs for millions in dormant accounts

Swiss banks said on Wednesday that another 300 names had been added to a list seeking heirs to accounts holding tens of millions of Swiss francs dormant for at least 60 years.

Swiss banks seek heirs for millions in dormant accounts
File photo: Fabrice Coffrini/AFP

The newly-added accounts hold assets of about eight million Swiss francs (7.4 million euros, $7.9 million), the Swiss Bankers Association said in a statement.
   
They follow an initial listing in December 2015 of more than 2,600 accounts of individuals or companies without any movements on their Swiss bank accounts for the past 60 years.
   
The dormant accounts are listed on a website www.dormantaccounts.ch to give their owners' heirs a chance to come forward and claim the funds.
   
“The banks today published further names for which it has not been possible to establish contact since 1956,” the association said in a statement.
   
Claimants have a year to come forward before banks must hand the assets over to the Swiss state.
   
For accounts that have been dormant for longer than 60 years, claimants have five years.
   
In total, the list includes some 4,000 accounts holding tens of millions of Swiss francs and dozens of safety deposit boxes.
   
Since the website was launched last December, Swiss banks have found heirs for about five percent of the accounts listed on the site, the banker association said.
   
The vast majority of the accounts concern Swiss nationals who lived in Switzerland, but the list also includes American, Italians, Germans and French citizens.
   
Some of the account holders on the list were born in the 19th century and include industrial groups.
   
Certain accounts have no corresponding names or addresses and are identified only through an ID number found in a passbook which, in theory, should be in the possession of the account holder.
   
Switzerland has previously published lists of dormant accounts, but only those with a direct link to victims of the Holocaust.
   
A 1998 agreement that sought to resolve the controversy surrounding Holocaust-era accounts saw Swiss banking giants UBS and Credit Suisse pay out $1.24 billion to a victims fund managed by New York-based judge Edward Korman.

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Reader question: Can a foreign national obtain a loan in Switzerland and under what conditions?

When it comes to borrowing money from a Swiss bank, nationality may play a role in some cases, but not in others. This is what you should know about this process.

Reader question: Can a foreign national obtain a loan in Switzerland and under what conditions?
Getting a losn in Switzerland is subject to many conditions. Photo by Claudio Schwarz/Unsplash

Like almost everything in Switzerland, consumer loans are regulated by legislation, in this case the Consumer Credit Act.

It defines a loan as between 550 and 80,000 francs, “offered by commercial providers of financial services”. Lower or higher amounts are not subject to the Consumer Credit Act.

As is the case in many other countries, Swiss banks have strict criteria about who they lend money to. After all, no financial institution wants to deal with people who are not creditworthy.

Whether or not a foreign national can borrow money from a bank depends on their permanent place of residence and permit status.

As a rule, Swiss lenders don’t give loans to non-residents. So if you reside abroad, there is practically no chance that a bank in Switzerland will lend you money.

However, some financial institutions make exceptions for cross-border workers. If you fall under this category, you can use this interactive tool, select “ Permit G” under “Residence Permit” and see what, if any, options, there are.

READ MORE: EXPLAINED: What cross-border workers should know about taxation in Switzerland

If you are a foreign national but have a permanent residence status (Permit C), your chances of getting a loan are practically the same as those of Swiss citizens — provided, of course, that you meet all the requirements set by lenders (see below).

What about other permit holders?

If you have a B Permit, you might be approved for a loan, depending on how long you have had this permit — obviously, the longer the better.

However, “you may be offered a higher interest rate or a limited loan amount. This is because of the statistically higher probability that you will return to your home country. Some lenders require the loan to be repaid by the time the B permit expires”, according to consumer comparison site comparis.ch 

Holders of other, temporary or conditional permits are not accepted.

READ MORE: ‘A feeling of belonging’: What it’s like to become Swiss

What conditions — other than residence permit — should you fill to be considered for a loan?

You must be at least 18 years of age, though additional restrictions may apply to applicants under 25 — for instance, a higher interest rate or a limited loan amount. That’s because “lenders are generally more cautious with young applicants as their financial circumstances are usually less settled and the risk of default is deemed to be higher,” Comparis noted.

The same cautious approach applies to pensioners, especially those who have no regular income. The social security payments (AHV/AVS) do not count as income for the purpose of the loan.

There is also other eligibility criteria, based on employment status and salary. People with a regular income have a higher chance of obtaining a loan than those who are self-employed, temporarily employed, work on hourly basis or, logically, unemployed.

Other factors, including your existing debts, are also taken into account in the decision process.

Basically, lenders favour applicants with a stable income and good financial standing, in much the same way as supplemental health insurance carriers prefer young and healthy people.

Keep in mind that if your loan application is rejected, this will be recorded in the database of the  Central Office for Credit Information, making it more difficult, though not impossible, to get a loan in the future.

The same rules do not apply to American citizens

That’s because Swiss and European banks are subjected to US demands to disclose the assets of Americans overseas in order to prevent tax evasion.

As adherence to these requirements is a major headache for the banks and in some cases also violates their country’s privacy laws, financial institutions prefer not to deal with Americans at all, even those who are permanent residents.

If you are a US citizen who also has Swiss nationality, you may have an easier time of it, but could still face hurdles in obtaining loans and other banking services.

There is no immediate relief in sight, although many organisations representing Americans abroad are lobbying in Washington to change the existing legislation.

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