The amendments to the legislation applicable to credit contracts concluded with consumers

The most important provisions of the law 288/2010 regarding the approval of the government emergency ordinance no. 50/2010 regarding the credit contracts for consumers are:

I. Applicability:

  • The provisions don’t aply to credit contracts that are ongoing at the moment when present ordinance came into force, except the provisions related to refinancing and advance repayment.
  • Additional acts concluded and signed until the entry into force of Law 288/2010 remain in force and take effect in accordance with the contractual terms agreed by the parties.
  • Additional acts unsigned by consumers and considered to be tacit acceptance until the entry into force of Law 288/2010 will take effect in accordance with the terms in which they have been drafted, unless the consumer or the creditor notifies the contrary to the other party, within 60 days from the date of the entry into force of Law 288/2010.

II. Prohibition of commissions, fees and bank charges

  • It is expressly provided that it is forbidden to charge fees, charges, bank charges or other costs if the consumer  wants to change the dates of due rates;

III. Applicable bank interest:

  • It is expressly provided that in the credit contract will be specified the type of  bank interest: fixed or variable.
  • The legal provision according to which the bank interest margin can be changed only as a result of legislative changes which expressly require it was abolished.

IV. Penalty interest:

  • The limiting of the penalty interest was restricted only to certain special cases, the new law stipulating such situations as unemployment, drastical reduction of wages and decease.
  • Special penalty interest applied to people who have outstanding payments and are in one of the cases mentioned above, was limited to a maximum of 12 months from the date on which the event that caused the reductionof the income occurred. In case of decease, the period of time in wich this special interest penalty will be applied can not be less than six months.

V. Repayment:

  • If the debtor chooses to refund the credit, he is entitled to a reduction of the total cost of the loan represented by the bamk interest and the  costs due for the period between the date of prepayment and the date scheduled for contract termination.
  • The right of consumers to repay the advance payment can not be conditioned on a certain minimum amount or on a certain number of rates.

VI. Prohibition of abusive clauses in the credit contracts

  • It is prohibited the introduction of  clauses by which the creditor may declare the credit early due if the consumer has not met its obligations under other contracts with other creditors.
  • It is prohibited the introduction of clauses by which the creditor enforces the consumer to sign an insurance contract for the goods brought as guarantee with an insurance company agreed by the creditor.