Le surendettement engendre une double peine d’exclusion financière et sociale. Or les établissements financiers peuvent être excessivement incitatifs, et la France reste un des rares pays sans “Registre national du crédit”. Le nombre de ménages français ayant recours à une Commission de surendettement a été multiplié par 4 en 30 ans – soit 220 millions € de frais pour l’Etat et 7 milliards d’encours en péril en 2016. JeanLouis Kiehl agit sur trois volets : éduquer et accompagner les populations à risque par des consultations de proximité ; devenir partenaire des organismes au contact de l’insolvabilité pour former leurs équipes et les populations fragiles à une meilleure prévention ; créer une plateforme partenariale avec les établissements de crédit pour détecter en amont les personnes menacées et leur proposer un accompagnement. Enfin, il agit auprès des pouvoirs publics pour une politique de prévention active du surendettement.
Le réseau national comporte 26 associations fédérées, 124 points d’accueil, 640 bénévoles qualifiés pour 165 000 consultations de ménages et 68 200 heures de formations en 2016. La plateforme pilote de prévention du surendettement est lancée avec 60 partenaires bancaires et assurances, et 84 partenaires institutionnels. En 2015, il lance un programme innovant d’éducation financière et budgétaire “Dilemme” agréé par l’Education Nationale et en 2017 l’expérimentation d’un projet alternatif du Registre des Crédits en France.
QUI EST-IL ?
Jean-Louis commence à travailler dès l’âge de 14 ans. Il est lauréat de la Faculté de Droit Robert Schuman (droit des contentieux). Il a été délégué du médiateur de la République pendant 10 ans.
Although aware that unbalanced budgets ultimately limit solutions, Jean-Louis is committed to breaking the vicious circle of debt as early as possible. He reinforces partnerships with on-the-ground partners, including social landlords, energy providers, and social workers, to detect financial troubles of clients and beneficiaries as soon as possible, as well as finding solutions. Through a large range of workshops and trainings, Jean-Louis also raises at-risk populations’ awareness of debt issues so that problems can be prevented before they even surface.
Convinced that solving excessive debt issues implies a shared responsibility, Jean-Louis is now shifting the practices of banks and finance companies on credit. He is currently running a pilot of a platform that is dedicated to debt prevention and is co-led by a number of major finance companies. In addition, he works to advocate for government policies toward the creation of a Credit Bureau. Jean-Louis’ breakthrough strategies address the roots of the excessive debt crisis.
The particularities of the credit system in France have caused harmful social consequences. Because France is one of the three countries in the world that does not have a Credit Bureau through which citizens’ outstanding credits are registered, it is possible to accumulate significant consumer loans without any means for the lenders to know if other loans exist. As a result, two million people are multicredit holders and the amount of excessive consumer debt is higher than anywhere else in the world: €45,000 (US$58,600) on average. The social cost of this reality is significant: The news stories about debtors committing suicide or assaulting banks are alarmingly common, reflecting the loneliness, deterioration of the family unit, financial exclusion, and poverty that result from this situation.
In 2009, the French Court of Auditors indicated that the situation was worsening, especially as a result of the lack of integrated policy to deal with citizens’ growing debt issues. Whereas, debt committees were dealing with 90,000 cases a year in 1990, now they must take care of 220,000 cases a year, with total cost of €195 million (US$254 million) of services for the Bank of France. In a system where the market has its own rules, the crux of the problem remains the lack of preventive actions and indicators to evaluate bad debt. Even though this problem of debt pervades all population segments, the few charities that do help with financial issues focus their work on only the poorest populations. Excessive debt is a social phenomenon that crosses age and social class, and requires a solution that reflects this reality. Indeed, 45 percent of those in serious debt have salaried positions and are considered middle-class.
Although individuals are ultimately responsible for the management of their revenues and expenses, banks and finance companies create fundamental problems with the products they offer to consumers and their opposition to “credit reports.” If the U.S. has suffered from the subprime product, the most criticized financial product in France and Europe is revolving credit. This cash cow of finance companies generates a profit margin rate up to 40 percent with a 25 percent rate of interest for the debtors. On the other hand, the Athling report highlights ambiguous advertising strategies that promote the accessibility and low level of monthly payments of revolving credits. Debt recovery is also at the heart of controversial practices, including reminders to debtors’ employers, credit offers to insolvent clients, and the use of violence. A new legislation passed in June 2010 imposes a maximum rate of interest for revolving credit, and is thus a first step to limit damages. Finance companies now need to reinvent their business models to develop their customers’ loyalty and a more socially responsible image.
Due to increased demand, Jean-Louis has also created new strategies to reinforce his organization’s capacity: He continues to carry out the geographic expansion of his activities through a National Federation that already counts 19 regional associations and 117 welcome desks; he has developed online consultations to multiply the number of people that can access Cresus’ expertise (157,000 in 2010), and he has launched a web radio to provide information and advice to 250,000 in debt households.
To reinforce prevention and early detection of bad debt, Jean-Louis also offers trainings and workshops. First, he seeks to increase the number of actors who can prevent financial issues and provide support. He accomplishes this by transferring Cresus’ know-how and expertise to social workers, social landlords, and banks’ employees on legislations, consumer rights, as well as on how to detect the risk of over debt, or deal with debt recovery. Second, Jean-Louis raises awareness on budget and debt management among at-risk populations. He employs smart partnerships with organizations whose clients/beneficiaries have troubles paying the bills (e.g. social landlords and energy providers), do not use social benefits correctly (e.g. mutual groups) or need help on finance to ensure a long-lasting fresh start in life (e.g. social rehabilitation companies). Finally, Jean-Louis provides information and advice to individuals who may encounter financial troubles in the months to come, such as young people finishing their studies and coming to the point of earning their first revenues; or older people dealing with a small pension who often fall prey to over eager credit salesmen. In 2009 alone, more than 13,500 hours of training and information have been shared with these groups, generating great social impact as well as revenues for Cresus.
More recently, Jean-Louis has succeeded in creating a model that engages banks and finance companies in the prevention of excessive debt. In 2009, thanks to close links with the French Association of Finance Companies, he had the opportunity to present his concept in front of all the main banks and successfully convinced one to co-build the first experimental platform on excessive debt prevention. Launched in September 2010, the pilot has rapidly influenced the sector and seven partners are now part of the initiative. This platform allows the banks and Cresus to work together on excessive debt prevention. Through an extranet site, they both ensure the follow-up of clients in difficulty: Banks have the responsibility to detect clients with financial troubles early on and send their cases on the platform at the first “symptoms” (i.e. debiting payments refused or excessive overdraft). Under confidentiality clauses, a project team at Cresus will then diagnose personal and financial issues, freeze outstanding debts so that the situation does not get worse, and work on restructuring the debt. The role of Cresus has been particularly efficient: 80 percent of the main finance companies have accepted to be partners, and thus accept to spread debt payments over time and modify the nature of the credit.
The first evaluation shows the impact of this unique initiative with banks: In over 300 households that were part of the pilot, more than 70 percent are on the proper track to achieve a stable and balanced financial situation; 42 percent have modified their contracts to balance their budgets, and 100 percent of those who needed a rearrangement of their debts by creditors have obtained it. For the first partner, the Postal Bank, the initiative has successfully led to the recovery of €400,000 (US$521,260) overdue payments. In 2011, eight new partners joined the platform and Jean-Louis expects to support 100,000 people through it in 2012. As a unique initiative all over the globe, and even if Credit Bureaus exist elsewhere, excessive debt needs to be prevented and Jean-Louis is ambitious to spread his model in Europe.
The evaluation has also indicated that 72 percent of the people managed through the platform are multi-holders of credits. This fact reinforces Jean-Louis’ idea that a national register of debts has to be created to allow banks and finance companies to see if a person has outstanding credit before providing more. Through active participation on the committee to submit the dedicated law, Jean-Louis hopes the partnering banks will eventually support the project. Unfortunately, during Parliament’s vote in July 2011, the law passed, but it does not apply and he continues to lobby.
Because Jean-Louis lacked in depth expertise with citizen debt, he began to volunteer for a local association, Cresus, founded in 1993. He progressively built his own expertise on the topic until 2004, when he took the lead and brought a new approach and a new direction to the organization. Indeed, Jean-Louis wanted to help people find solutions out of debt. He decided to work full-time at the association and shift the organization’s practices toward an innovative model of prevention.
Determined to reach as many people as possible, Jean-Louis also led Cresus’ geographical expansion. He created the Cresus Federation and facilitated the emergence of nineteen regional associations. Local associations shared his vision and he was elected as President of the National Federation. Additionally, he became the CEO of the Strasbourg Association and transformed it into an experimental lab to design and launch new types of support, preventive trainings, microcredit programs, and web radio. Jean-Louis also facilitated close connections with banks and finance companies.