On 10 June 2017, the Law on Consumer Credit 2 came into force.
The law provides a mechanism ensuring rights and obligations of both consumers and creditors, in particular, through the following provisions:
- Creditors (banks and other financial institutions) are now required to assess consumer credit rating
- Consumer credit advertising must include accurate and clear information on the maximum amount, actual annual interest rate, maximum term and first payment amount in case of instalment purchase
- Credit advisor's role and services are defined
- Insufficient payment amounts are allocated in the following order of priority: i) overdue principal and overdue interest; ii) principal and interest; and iii) penalties and other charges
- Consumer credit may not be provided in foreign currency
- Borrowers gain the right of rescission within 14 days following execution of consumer credit agreement
- Creditors may not charge fees for early repayment
- Creditors are required to notify consumers of estimated cost of services rendered by third parties (insurance companies, appraisers, etc.)
The law applies to agreements entered into after 10 June 2017.