Regulatory Alerts2017-02-01
Added
Debt Collection Proceedings
The Bank of Israel establishes Directive no. 450, requiring banking corporations and credit-card companies to create a dedicated debt collection function managed by an executive, with oversight by senior management and the Board of Directors. The Directive caps penalty interest rates at the maximum rate charged for exceeding credit facilities in current or overdraft accounts and mandates transparent disclosure of interest formulas and indexation mechanisms in loan agreements. It regulates the frequency of notices, ensures customer access to account information and debt settlement copies, and imposes strict reporting, monitoring, and auditing obligations on banks regarding their agents and Execution Office proceedings. The Directive repeals Directive no. 409 and applies to loans issued before its effective date of February 1, 2017, for actions taken thereafter.
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