Regulatory Alerts2022-12-30
Added · Updated
Instruction (Historical) No. 20/2022
The Banco de Portugal establishes maximum effective annual rates (TAEG) and maximum nominal annual rates (TAN) applicable to consumer credit contracts concluded in the first quarter of 2023. The document specifies that personal credit for education, health, renewable energy, and equipment leasing is capped at 6.3%, while other personal credits are capped at 13.0%. Auto leasing for new and used vehicles is capped at 3.5% and 5.5% respectively, and credit cards, overdrafts, and credit lines are capped at 15.7%. These limits apply to contracts signed in Q1 2023 and entered into force on January 1, 2023.
Instruction No. 20/2022 BO No. 12/2022 4th Supplement • 2022/12/30 .................................................................................................................................................................................................. Topics Supervision :: Behavioral Supervision Mod. 99999940/T – 01/14
Index Text of the Instruction Text of the Instruction Subject: Disclosure of maximum rates applicable to consumer credit contracts in the 1st quarter of 2023
Decree-Law No. 133/2009, of June 2, which transposed into the internal legal order Directive No. 2008/48/EC, of April 23, regarding consumer credit contracts, established the regime of maximum rates applicable to these contracts.
According to Article 28 of Decree-Law No. 133/2009, in the wording in force, the maximum rates for each type of credit are determined based on the Average Annual Effective Global Rates (TAEG) practiced in the market by credit institutions in the previous quarter, increased by a quarter. Additionally, the maximum rate of any type of credit cannot exceed the average TAEG of the entire consumer credit market, increased by 50%. Applying the criterion defined in the law, the Banco de Portugal quarterly discloses the maximum rates for the different types of credit, for application to contracts to be concluded in the following quarter.
The rates defined in this Instruction constitute maximum limits to the charges that can be contracted in each type of credit contract, and under no circumstances can they be referred to as "legal rates". The freedom to contract financing conditions remains, with the sole exception of compliance with these limits.
Thus, in the exercise of the competence attributed to it by Article 17 of its Organic Law and by Article 28 of Decree-Law No. 133/2009, of June 2, the Banco de Portugal determines the following:
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Consumer credit contracts, concluded within the scope of Decree-Law No. 133/2009, of June 2, shall observe the regime of maximum rates defined in Article 28.
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In the 1st quarter of 2023, the maximum rates set out in the tables below apply, for each type of credit contract:
1st quarter of 2023
| TAEG maximum | ||
|---|---|---|
| Personal Credit | 6,3% | |
| Purpose: Education, Health, Renewable Energies and Financial Leasing of Equipment | ||
| Other Personal Credits (no specific financing, home, consolidated and other purposes) | 13,0% | |
| Auto Credit | ||
| Financial Leasing or ALD: new | 3,5% | |
| Financial Leasing or ALD: used | 5,5% | |
| With retention of ownership and others: new | 8,9% | |
| With retention of ownership and others: used | 11,9% | |
| Credit Cards, Credit Lines, Bank Current Accounts and Overdraft Facilities | 15,7% |
1st quarter of 2023
| TAN maximum | ||
|---|---|---|
| Credit Overdrafts | 15,7% |
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The types of credit contracts set out in the previous tables correspond to the credit categories defined in Instruction No. 14/2013, except for credit overdrafts which are defined in Decree-Law No. 133/2009.
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This Instruction enters into force on January 1, 2023.