Circular Letter No. CC/2021/00000016: Interpretations on the Application of Laws No. 44/2020, 53/2020, and 57/2020

Circular Letter No. CC/2021/00000016
Sent to:
Credit Institutions; Electronic Money Institutions; Payment Institutions and Financial Companies.
Mod. 99999924/T – 01/14
Subject: Interpretations on the application of Law No. 44/2020, of August 19, Law No. 53/2020, of August 26, and Law No. 57/2020, of August 28 Following the entry into force, on January 1 last, of Law No. 44/2020, of August 19 (“Law No. 44/2020”), Law No. 53/2020, of August 26 (“Law No. 53/2020”) and Law No. 57/2020, of August 28 (“Law No. 57/2020”), through which the legislator promoted significant changes to the regulatory framework applicable to the marketing of products and services in retail banking markets, the Bank of Portugal has been receiving a set of questions from supervised institutions regarding the application of the aforementioned instruments. In this context, and in order to ensure a harmonized application of the regulatory framework, the Bank of Portugal deems it appropriate to transmit the following:

1. Expansion of the list of minimum banking services (Article 3 of Decree-Law No. 27-C/2000, of March 10, amended by Law No. 44/2020)
   The holder of a minimum banking service account, in addition to being able to make five monthly transfers, with a limit of 30 euros per transaction, under the provisions of paragraph 2 of Article 3 of Decree-Law No. 27-C/2000, of March 10, also benefits, similarly to any other banking client, from the prohibition on charging commissions established under the terms of Article 3-A of Decree-Law No. 3/2010, of January 5, added by Law No. 53/2020.
2. Commissioning of operations through payment applications operated by third parties (Article 3-A of Decree-Law No. 3/2010, of January 5, added by Law No. 53/2020)
   2.1. A “payment application operated by a third party” shall be considered a computer program or equivalent loaded on a device that allows a user, holder of an account or a payment card, to execute and authenticate, at least, one of the following payment operations: (i) the immediate transfer and receipt of funds deposited in the account or payment card; (ii) the making of payments; (iii) the issuance of virtual cards; or (iv) the issuance of codes for cash withdrawal at Multibanco network ATMs.

Mod. 99999924/T – 01/14
2.2. The term “transfers” shall be considered to include, in addition to SEPA+ credit transfers (the “traditional” and immediate ones), card-based operations, which include “peer-to-peer” transfers.
2.3. The limit of 30 euros per transaction, up to which the charging of commissions is prohibited, applies to any operations carried out through payment applications operated by third parties, with the exception of those in which, regardless of their amount, the charging of commissions is not legally admissible.
2.4. In the case of transfers carried out through payment applications operated by third parties, the limits on charging commissions are alternative to each other. For example, institutions may charge a commission for executing a transfer in the amount of 31 euros, but may no longer demand the payment of any commission from a consumer who makes 25 transfers of 6 euros within a one-month period.
2.5. Institutions may define exemptions regarding the commissioning of operations carried out through payment applications operated by themselves. Institutions may also set distinct commissions for operations carried out through their own payment applications and for operations carried out through payment applications operated by third parties, provided that the principle of proportionality is observed and that the differentiation of commissions does not go beyond what is necessary to prevent specific risks and to safeguard the financial and operational stability of payment services.
3. Opening or maintenance of a current deposit account within the framework of the conclusion or renegotiation of mortgage and housing credit contracts (Article 11 of Decree-Law No. 74-A/2017, of June 23, amended by Law No. 57/2020)
In situations where the opening or maintenance of a current deposit account is required as a condition for the conclusion or renegotiation of mortgage and housing credit contracts, lending institutions are obliged to accept the indication, by the banking client, of an account domiciled at another credit institution. This obligation applies to credit contracts concluded after January 1, 2021, as well as to the renegotiation of credit contracts that occurs after that date, regardless of when those credit contracts were concluded.
4. Prohibition on charging commissions within the framework of mortgage and housing credit contracts and consumer credit contracts (Article 28-A of Decree-Law No. 74-A/2017, of June 23, and Articles 14-A and 23-A of Decree-Law No. 133/2009, of June 2, added by Law No. 57/2020)

Mod. 99999924/T – 01/14
4.1. The prohibition on charging commissions on the processing of installments covers situations where the lending institution processes the installments via direct debit from a current deposit account domiciled at that institution, but also situations where third parties are involved in the processing of installments (for example, through direct debit from an account domiciled at another credit institution other than the lender), regardless of whether there is a corporate relationship between these entities and the lending institution.
4.2. The prohibition on charging commissions for the renegotiation of consumer credit contracts now established encompasses the alteration of contractual clauses, related or not to the revision of financial conditions, that occurs during the term of these contracts.