After six years of negotiation, EU lawmakers have passed the heavily disputed consumer credit directive.
It gives Europeans the same rights and harmonizes information standards across the EU, enabling consumers to compare offers when looking for loans. For Poland, the directive may result in the repeal of the Anti-Usury Act of 2005.
“When Polish consumers have the opportunity to access credit offers abroad, the natural consequence will be repealing the Anti-Usury Act,” Jerzy Banka of the Association of Polish Banks told the Polish Press Agency (PAP).
The Anti-Usury Act limits the consumer interest rate to quadruple the security rate of the National Bank of Poland. Violation of the act can lead to two years of imprisonment or a fine.
Supporters of the act say it provides special protection for consumers.
However, some financial experts say the act hasn’t been useful for consumers because it doesn’t protect them before real exploitation takes place.
According to the new EU directive, lender-borrower contracts could be made by Internet or mobile phone. The directive also standardizes information provided to consumers when signing contracts, making it easier to compare the total cost of loans by using an annual percentage rate of interest (APR) as a basis for calculation.
The new rules approved by the EU Parliament on Jan. 16 are intended to harmonize the 800 bln euro consumer credit market and open it up to EU-wide competition. The directive will apply to personal loans ranging from 200 euro to 75,000 euro but does not cover mortgages or charge cards.
The EU Council is now expected to adopt the legislation in the weeks to come. The act gives EU members two years to implement the directive into national law. This means that in 2010 all Polish consumers will have the opportunity to obtain credit in any EU country.