Regulatory Alerts2024-10-17
Added · Updated
Circular Letter No. CC/2024/00000033 on Prevention and Regularization of Credit Default
The Banco de Portugal establishes binding interpretations and best practices for credit institutions regarding the prevention and regularization of credit defaults under the General Default Regime. Institutions are prohibited from charging renegotiation fees or increasing interest rates during default prevention or regularization processes, and must apply specific indicators, such as a Debt Service to Income ratio of 50% or higher, to identify financial degradation. Institutions must incorporate these interpretations into their procedures immediately and implement the recommended best practices by January 1, 2026.