Duties on the prevention and regularisation of default situation on consumer credit contracts
Regulation no 7/2021 implementing the duties on prevention and out-of-court settlement of breach of credit contracts with private clients
The Bank of Portugal published on 20th December the Regulation no 7/2021 («Regulation») that implements the amendments introduced by Decree-Law no. 70-B/2021 that established exceptional and temporary measures on credit protection and amended the regime on prevention and out-of-court settlement of breach of credit contracts with private clients.
The Regulation implements the duties of credit institutions shall comply with in what regards the prevention and out-of-court settlement of breach of credit contracts with private individual clients, namely:
- Information for the public on the situation of breach of credit contracts and the support network of out-of-court settlement;
- Contacts with clients in risk of default or delay in payments on the obligations arising from the credit contract;
- Evaluation of the financial capacities of clients.
The Regulation also establishes the criteria for elaboration and implementation of PARI (Action Plano for Default Risk) and the application of PERSI (Out-of-court Procedure for the Settlement of Default Situations). In the application of PERSI, the Regulation also set forth the information that should be presented in the communication to clients in the beginning and in the extension of PERSI and the implementing procedure duties of PERSI.
Regulation of Bank of Portugal no. 17/2012 is repealed with the publication of this Regulation.
To access to the entire wording of Regulation of Bank of Portugal no. 7/2021 please click here (in Portuguese).
For more information on this subject, please contact:
Head of the Banking and Finance Department