Regulatory Alerts2022-09-01
Added · Updated
Instruction No. 14/2022
The Bank of Portugal establishes the maximum annual effective global rates (TAEG) and maximum nominal annual rates (TAN) applicable to consumer credit contracts concluded in the fourth quarter of 2022. These limits apply to specific credit categories including personal credit, education and health financing, vehicle leasing, and credit cards, with TAEG caps ranging from 3.3% to 16.0% and a TAN cap of 16.0% for credit overdrafts. The instruction enters into force on October 1, 2022, and prohibits referring to these maximums as legal rates while preserving contractual freedom within these bounds.
Instruction No. 14/2022 BO No. 8/2022 Supplement • 2022/09/01 .................................................................................................................................................................................................. 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 4th quarter of 2022
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 current wording, 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 one 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 by law, the Bank of 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 on the charges that can be contracted in each type of credit contract, and under no circumstances may 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 Bank of Portugal determines the following:
-
Consumer credit contracts, concluded within the scope of Decree-Law No. 133/2009, of June 2, must observe the maximum rate regime defined in Article 28.
-
In the 4th quarter of 2022, the maximum rates set out in the tables below apply to each type of credit contract:
Instruction No. 14/2022 BO No. 8/2022 Supplement • 2022/09/01 Topics Supervision :: Behavioral Supervision .................................................................................................................................................................................................. Mod. 99999940/T – 01/14
4th quarter of 2022
| Credit Type | Maximum TAEG |
|---|---|
| Personal Credit | |
| Purpose: Education, Health, Renewable Energies and Financial Leasing of Equipment | 6.8% |
| Other Personal Credits (without specific financing, home, consolidated and other purposes) | 13.3% |
| Auto Credit | |
| Financial Leasing or ALD: New | 3.3% |
| Financial Leasing or ALD: Used | 5.1% |
| 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 | 16.0% |
4th quarter of 2022
| Credit Type | Maximum TAN |
|---|---|
| Credit Overdrafts | 16.0% |
-
The types of credit contracts in the tables above correspond to the credit categories defined in Instruction No. 14/2013, except for credit overdrafts which are defined in Decree-Law No. 133/2009.
-
This Instruction enters into force on October 1, 2022.