Borrowers given additional protections in Poland
New rules will increase consumer protection against extortionate payday lending.
The Polish government has accepted the foundations of a revamp of the financial market supervision law, Polish news portal TVN 24 Świat i Biznes reported.
According to the Governmental Information Center, the most important goal of the project is to provide clients with additional protection.
“New regulations will have a positive impact on both customers and the loan sector,” the Ministry of Finance press bureau stated in a press release.
“Customers will be better protected due to an elimination of the inflated and unjustified fees for granting and handling loans. […] Customers will also get additional protection when overdue as the project regulates matters of the interest for default and the costs of vindication,” the press release states.
The government project also expands the authority of the Financial Supervisory Authority (KNF). The KNF will be entitled to run preliminary investigations against the entities that allegedly work without a permit in all the sectors of the financial market.
According to the project, the level of the interest for loans in default will not be able to exceed the value of the Lombard credit of National Bank of Poland (currently 4 percent) times six. The limit of the interest for default will also include the vindication fees as many of the pay-day loan companies were charging clients with additional unjustified and inflated costs.
Additionally the project will regulate so-called loan rolling. Many pay-day loan companies were bypassing the limits by signing a number of short-time loans with a same client.
Photo courtesy of Gregory F. Maxwell
