Instruction No. 19/2024

Instruction No. 19/2024
BO No. 12/2024 2nd Supplement • 2024/12/20
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Topics
Supervision :: Behavioral Supervision
Mod. 99999940/T – 01/14

Index
Text of the Instruction
Text of the Instruction
Subject: Calculation and periodic disclosure of the maximum Effective Annual Percentage Rates ("APR") limits to be observed in the conclusion of consumer credit contracts

In accordance with the provisions of Article 28(3) of Decree-Law No. 133/2009 of June 2 ("Decree-Law No. 133/2009"), it is the responsibility of the Bank of Portugal to determine and disclose the maximum APR limits (also referred to as "maximum APRs") to be observed in the conclusion of consumer credit contracts each quarter, as well as to identify the types of credit contracts relevant for the application of these maximum limits.

The determination of the maximum APRs applicable to consumer credit contracts was previously based on information reported to the Bank of Portugal under Instruction No. 14/2013. However, since the information in question is now also obtained through the Credit Liability Central Registry, it appears unnecessary to maintain the reporting obligation regulated in the aforementioned Instruction.

This Instruction, which revokes Instruction No. 14/2013, identifies the types of consumer credit contracts used for the calculation and disclosure of maximum APRs. Additionally, it specifies how the maximum APRs are disclosed to the public each quarter.

This Instruction was subject to public consultation, in accordance with the provisions of Article 101 of the Administrative Procedure Code.

Thus, in the exercise of the competence attributed to it by Article 17(1) of its Organic Law and by Article 28(3) of Decree-Law No. 133/2009 of June 2, the Bank of Portugal determines the following:

Article 1.
(Object)
For the purposes of calculation and periodic disclosure by the Bank of Portugal of the maximum APR limits to be observed in the conclusion of consumer credit contracts, within the scope of application of Decree-Law No. 133/2009 of June 2, this Instruction establishes:
a) The types of credit contracts to be used in the calculation and disclosure of maximum APRs; and b) The method of periodic disclosure of maximum APRs.

Article 2.
(Types of credit contracts used in the calculation and disclosure of maximum APRs)

For the purposes of calculating and disclosing the maximum APR limits to be observed in the conclusion of consumer credit contracts, the following types of credit contracts are used:
a) Personal Credit:
i) Purposes: Education, Health, Energy Transition, and Financial Leasing of Equipment; ii) Purposes: Home, Works, Consolidated Credit, and Other Purposes. b) Auto Credit and Other Vehicles:
i) Purpose: New cars and other vehicles; ii) Purpose: Used cars and other vehicles; iii) Financial Leasing or Long-Term Rental (LTR) of new cars and other vehicles with purchase option or obligation; iv) Financial Leasing or Long-Term Rental (LTR) of used cars and other vehicles with purchase option or obligation. c) Credit Cards, Credit Lines, Bank Current Accounts, and Overdraft Facilities.
The Bank of Portugal also discloses the maximum nominal annual rate ("NAR") limit applicable to credit contracts in the category of credit limit exceedance.

Article 3.
(Categories included in the types of credit contracts used in the calculation and disclosure of maximum APRs) The calculation of the maximum APR limits applicable to each type of credit contract identified in the previous article takes into account the following credit categories:
a) Personal Credit – credit with a defined repayment schedule, loan amount, and duration defined at the start of the contract, excluding auto credit, including the following subcategories:
i) Education Purpose – credit intended for financing education expenses that may be deducted for Personal Income Tax (IRS) purposes; ii) Health Purpose – credit intended for financing health expenses exempt from Value Added Tax ("VAT"), with reduced VAT rates and/or requiring a medical prescription, which may be deducted for Personal Income Tax (IRS) purposes; iii) Energy Transition Purpose – credit intended for financing the acquisition and installation of renewable energy equipment, or other equipment or interventions, including works, for improving the energy efficiency of buildings; iv) Equipment Financial Leasing Purpose – financing of equipment involving financial leasing operations with a purchase option or obligation, regardless of the purpose to which the leased asset is destined; v) Home Purpose – credit intended for the purchase of furniture and household equipment; vi) Works Purpose – credit, not secured by a mortgage on real estate or other guarantee commonly used on real estate, nor secured by a right relating to real estate, intended for carrying out works on properties for permanent primary residence, secondary residence, or for rental, with the exception of credits for energy transition purposes; vii) Consolidated Credit Purpose – credit, not secured by a mortgage on real estate or other guarantee commonly used on real estate, nor secured by a right relating to real estate, whose purpose is to concentrate two or more credits previously held by the borrower into a single loan at a single institution;

Instruction No. 19/2024 BO No. 12/2024 2nd Supplement • 2024/12/20 Topics Supervision :: Behavioral Supervision
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Mod. 99999940/T – 01/14 viii) Other Purposes – credit intended for financing a specific good or service and which is not included in the previous categories, and credit granted without defining the purpose to which the borrowed amount is destined. b) Auto Credit and Other Vehicles – credit intended for the acquisition or leasing of a car or other vehicles subject to registration, with a defined repayment schedule, loan amount, and duration at the start of the contract, including the following subcategories:
i) Purpose: New cars and other vehicles – credit for the acquisition of new cars and other vehicles, with no prior ownership registration; ii) Purpose: Used cars and other vehicles – credit for the acquisition of used cars and other vehicles, where at least one ownership registration has already occurred; iii) Financial Leasing or Long-Term Rental (LTR) of new cars and other vehicles with purchase option or obligation: financing of new vehicles, with no prior ownership registration, involving financial leasing or LTR operations with a purchase option or obligation; iv) Financial Leasing or Long-Term Rental (LTR) of used cars and other vehicles with purchase option or obligation: financing of used vehicles, where at least one ownership registration has already occurred, involving financial leasing or LTR operations with a purchase option or obligation. c) Credit Card – contract of indefinite duration or automatic renewal, without a fixed repayment schedule, in which a maximum credit limit is established and the use of credit is carried out via a card, including the following subcategories:
i) With free-float period – a credit card that allows the use of credit for a minimum period of 30 calendar days without the charging of interest, regardless of the repayment method agreed with the consumer; ii) Without free-float period – a credit card that, in at least one of the possible repayment methods agreed with the consumer, does not allow the use of credit for a minimum period of 30 calendar days without the charging of interest; iii) Deferred Debit Card – a credit card in which the outstanding balance is always paid in full by the consumer on a date agreed with the institution, with no interest charged.

Instruction No. 19/2024 BO No. 12/2024 2nd Supplement • 2024/12/20 Topics Supervision :: Behavioral Supervision
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Mod. 99999940/T – 01/14 d) Credit Line – contract of indefinite duration or automatic renewal, with a fixed repayment schedule, in which a maximum credit limit is established. e) Bank Current Account – contract of fixed, indefinite, or automatic renewal duration, without a fixed repayment schedule, in which a maximum credit limit is established. f) Overdraft Facility – a credit usage facility associated with a demand deposit account, in which, in addition to the balance of that account, its movement is allowed up to a maximum credit limit previously established in an express contract for that purpose. In overdraft facilities, the following subcategories are distinguished:
i) With salary direct debit and repayment period exceeding one month – an overdraft facility granted based on salary direct debit, whose contract provides for a repayment obligation in a period exceeding one month; ii) Without salary direct debit and repayment period exceeding one month – an overdraft facility granted without salary direct debit, whose contract provides for a repayment obligation in a period exceeding one month; iii) With salary direct debit and repayment period equal to or less than one month – an overdraft facility granted based on salary direct debit, whose contract provides for a repayment obligation in a period equal to or less than one month; iv) Without salary direct debit and repayment period equal to or less than one month – an overdraft facility granted without salary direct debit, whose contract provides for a repayment obligation in a period equal to or less than one month. g) Credit Limit Exceedance – an overdraft tacitly accepted by the institution, allowing a consumer to access funds exceeding the balance of their demand deposit account or the agreed overdraft facility.

Article 4.
(Method of Disclosure of Maximum APRs)
The maximum APR limits to be observed in the conclusion of consumer credit contracts and the maximum NAR applicable to credit contracts in the category of credit limit exceedance are disclosed through the Bank of Portugal’s institutional website.

Article 5.
(Repealing Provision)
Instruction No. 14/2013, published in the Official Bulletin of the Bank of Portugal No. 6/2013 of June 17, 2013, is revoked.

Article 6.
(Entry into Force)

This Instruction enters into force on April 1, 2025.
The maximum APRs applicable until June 30, 2025, continue to consider the types and categories of credit provided for in Instruction No. 14/2013.

Instruction No. 19/2024

Lineage: In force