Just before Christmas, the Sejm adopted the Act on Credit Servicers and Credit Purchasers, which aligns Polish law with the EU Directive on credit servicers and credit purchasers (NPL Directive). In this article, we discuss what changes await lenders.

The newly adopted act also contains provisions amending the Consumer Credit Act. It likely comes as no surprise that the amendment imposes additional obligations on lenders and introduces solutions which are intended to better protect borrowers.

New Obligations for Lenders

Pursuant to the provisions of the Act, the lender will be obliged to:

• in the event of a delay in repayment of the obligation, demand repayment from the borrower, setting a deadline of no less than 14 business days from the date of receipt of the notice;
• inform the borrower, in the aforementioned demand, of the possibility to submit, within 14 business days from the date of receipt of the demand, a request for debt restructuring;
• have in place appropriate policies and procedures regarding the application of adequate restructuring measures prior to initiating enforcement proceedings.

Possibilities Regarding Debt Restructuring

Debt restructuring may consist, in particular, of the full or partial refinancing of the credit agreement or amending the provisions of the credit agreement, including:

• extending the term of the credit agreement;
• changing the type of credit agreement;
• deferring the repayment of all or part of the instalments for a specified period;
• changing the interest rate;
• suspending repayment of the credit;
• partial repayment;
• currency conversion;
• partial write-off and consolidation of debt.

In each case, restructuring will take place on terms established by mutual agreement between the borrower and the lender.

Restructuring will not be mandatory; however, if the client’s request is rejected, the lender will be required to justify its decision. The information on the rejection of the request must be provided to the consumer without undue delay in writing or on a durable medium.

Information Obligations under Article 30a

In addition, a new Article 30a will be introduced into the Consumer Credit Act, under which the lender or credit intermediary, no later than 30 days prior to the amendment of the terms of the credit agreement, will be obliged to provide the consumer with:

• a clear description of the proposed changes;
• information on the consumer’s right to submit a complaint to the lender, and, in the event that their claims are not upheld – to submit a request for the case to be examined by the Financial Ombudsman;
• and also information on the possibility of pursuing claims in court or through alternative dispute resolution mechanisms.

This time limit shall not apply if the changes to the agreement are made at the request of the consumer or the consumer has agreed to receive this information without observing the statutory deadline.

This obligation will not apply in the cases described in Article 36(1)-(3) of the Consumer Credit Act, i.e., in the case of changes in the interest rate.

Legislative Timeline

The Act has been adopted by the Sejm. It will now go to the Senate and then to the President’s desk. The new provisions will mostly enter into force 14 days after their promulgation. However, the newly added Article 30a to the Consumer Credit Act will enter into force 2 months after the date of promulgation.