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Adjusting the processes of a lending institution to the amendment of the anti usury Act

The Act of 6 October 2022 on amending laws to counter usury (Journal of Laws 2022, item 2339; the “Anti-usury Act”) has shaken up the lending market. While the reduction of the limits on maximum non-interest credit costs is acute for lending institutions, this is neither the only nor the most difficult challenge introduced by the amended legislation and which lending institutions will have to face.

One of the biggest problems for the industry is the new way of assessing the creditworthiness of borrowers. Article 9a of the amended Consumer Credit Act is written in a way that does not allow for easy and clear interpretation of the provisions.

Problems include both the concepts introduced such as ‘trusted provider’, how to check the borrower in external databases (business information bureaus and credit information bureaus), or how and when to collect statements from borrowers about their income and regular household expenses.
Interpretation of the provisions concerning the documentation to be attached by the lender to the statement to demonstrate this income is also proving problematic.

In the context of the above changes introduced by the amendment, we have prepared for the client – the lending institution:

• a comprehensive description of the changes introduced by the Act, helping to establish a precise timetable for the process of necessary modifications and the scope of adjustment to the new regulations;
• a legal opinion on the most important aspects of the amendment, including in particular the practical approach to analysing the creditworthiness of potential borrowers in light of Article 9a of the Consumer Credit Act;
• an assessment of the existing loan documentation and recommendations on adjusting it to the requirements introduced by the new regulations.

In addition, together with the client, we carried out a thorough step-by-step verification of the planned consumer lending process implementing the indicated recommendations. In addition to adapting the process to the new regulations, emphasis was placed on maximising its user-friendliness.