Instruction No. 7/2023: Disclosure of Maximum Rates Applicable to Consumer Credit Contracts in the Second Quarter of 2023

Instruction No. 7/2023
BO No. 2/2023 3rd Supplement • 2023/03/09
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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 2nd quarter of 2023

Decree-Law No. 133/2009, of June 2, which transposed into the domestic legal order Directive No. 2008/48/EC, of April 23, on 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 a quarter. Additionally, the maximum rate of any type of credit may not 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:

1. Consumer credit contracts, concluded under Decree-Law No. 133/2009, of June 2, must observe the maximum rate regime defined in Article 28.

Instruction No. 7/2023 BO No. 2/2023 3rd Supplement • 2023/03/09 Topics Supervision :: Behavioral Supervision
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Mod. 99999940/T – 01/14

2. In the 2nd quarter of 2023, the maximum rates set out in the tables below apply to each type of credit contract:

2nd quarter of 2023

Credit Type	Maximum TAEG
Personal Credit
Purpose: Education, Health, Renewable Energies and Financial Leasing of Equipment	6.7%
Other Personal Credits (no specific financing, home, consolidated and other purposes)	13.9%
Auto Credit
Financial Leasing or ALD: New	4.1%
Financial Leasing or ALD: Used	6.2%
With retention of ownership and others: New	9.5%
With retention of ownership and others: Used	12.7%
Credit Cards, Credit Lines, Bank Current Accounts and Overdraft Facilities	16.9%

2nd quarter of 2023

Credit Type	Maximum TAN
Credit Overdrafts	16.9%

3. The types of credit contracts listed 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.

4. This Instruction enters into force on April 1, 2023.