This law shall apply to non-bank financial institutions granting credit and entities engaged in debt recovery in relation to credit granted to consumers, establishing rules for the protection of consumers against excessive interest rates.
The annual effective interest rate (DAE) on mortgage loans for real estate investment may not exceed by more than 8 percentage points the interest rate charged by the National Bank of Romania on lending facilities.
DAE on consumer credit must not exceed more than 27 percentage points above the lending facility interest rate of the National Bank of Romania.
By way of exception to the above rule, it is provided that:
- for consumer loans up to a maximum amount of RON 5,000 (approx. EUR 1,000), the total cost of borrowing may not exceed 1% per day and, at the same time, the total amount payable by the consumer may not exceed twice the total loan amount;
- for consumer loans amounting between RON 5,001 and RON 10,000 (approx. EUR 1,000 and EUR 2,000), the total cost of borrowing may not exceed 0.8% per day and, at the same time, the total amount payable by the consumer may not exceed twice the total loan amount;
- for consumer loans amounting between RON 10,001 and RON 25,000 (approx. EUR 2,000 and EUR 5,000), the total cost of borrowing may not exceed 0.6% per day and, at the same time, the total amount amount payable by the consumer may not exceed twice the total loan amount.
For the purpose of balancing the benefits and reducing the risks generated by consumer credit contracts, the law is also applicable to contracts in progress, i.e. contracts active on the date of entry into force of the law, which are maturing and for which the payment arrears are 60 days or less. Furthermore, all existing consumer credit contracts shall be brought into compliance with the provisions of the law in accordance with the procedure outlined therein.
If the level of DAE or, where applicable, the total cost of credit per day and/or the total amount payable by the consumer are higher than the ceilings set out above, these levels will be reduced accordingly at the request of the consumer.
If the statutory limits are exceeded, the consumer may ask the lender to revise the contract and the lender is obliged to send a written proposal for the adjustment of the credit contract within 30 days of receiving the consumer’s request.
In the event of an explicit refusal of the consumer’s request or in the event the lender postpones a reply to the consumer’s request for more than 45 days from the date of request for adjustment of the credit contract, the consumer may apply to the competent court in order to obtain the adjustment of the credit contract.
The law shall enter into force 90 days from the date of publication in the Official Gazette of Romania.
