The Ministry of Economy, Investments and Industry has drafted the Consumer Credit Bill in response to the need to transpose European requirements in the field of consumer credit into Bulgarian legislation.
The main objective of the proposed changes is to ensure a high level of consumer protection while establishing clear and predictable rules for businesses. The Bill provides for strengthened supervision of creditors and credit intermediaries, improvements to creditworthiness assessments, greater transparency in the provision and advertising of credit products, and measures to curb unfair practices.
As part of the public consultation, opinions and proposals have been submitted by representatives of businesses, the credit sector and its industry associations, consumer protection organisations and other stakeholders. All proposals will be carefully analysed and taken into account when finalising the Bill.
The Bill also provides for mechanisms to assist consumers experiencing difficulties in meeting their repayment obligations. Creditors should identify such difficulties at an early stage and, where appropriate, apply suitable measures tailored to the consumer’s individual circumstances. These may include rescheduling payments, extending the term of the credit agreement, modifying its terms and conditions, reducing the borrowing rate, offering a payment holiday or refinancing.
With regard to charges for late payment, the absence of an expressly defined cap on contractual penalties in the Bill does not mean that consumers are left without protection. Contractual terms must comply with the requirements of consumer protection legislation, and excessive penalties are deemed to constitute unfair terms and are therefore null and void. The Commission for Consumer Protection has the power to review contracts containing standard terms and conditions and to take action where infringements are identified.
For small and short-term loans, the Bill proposes a specific approach to setting a cap on total costs. The aim is to take account of the specific characteristics of these products and to strike a balance between consumer protection and the sustainable provision of financial services.
Access to databases will take into account the competence of the authorities responsible for administering them, as well as personal data protection requirements. The Ministry of Economy, Investments and Industry considers that consumer protection, including the protection of vulnerable persons, and the lawful processing of personal information must be guiding principles.
The Ministry will continue its open dialogue with all stakeholders with a view to developing an effective regulatory framework that transposes European requirements, ensures effective consumer protection and creates clear and predictable conditions for businesses.