The Anti-Usury Act has been passed

Available languages: PL

An act to amend the laws to combat usury[1] (the “Act”) has been passed. It introduces important changes to the operations of lending institutions and to the lending of capital to consumers. Although the purpose of the Act is to combat rogue lenders, the changes provided for in the Act will affect all entities offering financing to Polish consumers.

What changes does the Act provide for?

The Act introduces the following key changes:

  • Reduction of limits on non-interest costs of consumer credit

  • The Act reduces the limits on non-interest costs of consumer credit by several times – from 25% to 10% of the total loan amount for costs independent of the loan term and from 30% to 10% of the total loan amount for costs dependent on the loan term. Separately, the limit of non-interest credit costs for loans with a repayment period of less than 30 days has been set – it will amount to a maximum of 5% of the total loan amount. In addition, the limit of non-interest costs of consumer credit over the entire credit period has been reduced more than twofold – from 100% of the total amount of credit to 45% of this amount.

  • Changes to the creditworthiness assessment process

  • Until now, lending institutions were obliged to assess a consumer's creditworthiness before concluding an agreement with such person. However, this assessment did not bind them when deciding whether to grant consumer credit. The Act changes this – the granting of consumer credit will depend on a positive assessment of the borrower's creditworthiness by the lending institutions. The Act regulates the process of this assessment and provides for a number of severe sanctions if this obligation is not properly performed by a lending institution.

  • Supervision of lending institutions by the PFSA

  • Under the Act, lending institutions will be supervised by the Polish Financial Supervision Authority (“PFSA”). In practice, this will entail, inter alia, reporting obligations, the possibility of the PFSA issuing recommendations and the PFSA’s application of supervisory measures (including a fine of up to PLN 15,000,000 imposed on a lending institution, a fine of up to PLN 150,000 imposed on a member of the management board or deletion of a lending institution from the register of lending institutions) and the obligation for a lending institution to bear the costs of the PFSA’s supervision.

    In addition, the Act introduces the threat of a fine of up to PLN 1,000,000 (up to PLN 500,000 in the case of an unintentional act) or imprisonment for up to two years (up to one year in case of unintentional act), or the application of both these penalties together, in the event that a person responsible at a lending institution for providing information to the PFSA provides information that is inconsistent with the facts or otherwise misleads the authority.

  • Increased minimum share capital of lending institutions

  • The Act significantly increases the required minimum share capital of lending institutions – from PLN 200,000 to PLN 1,000,000. Furthermore, in the case of a limited liability company, a supervisory board will be a mandatory element of corporate governance.

When will the changes come into force?

In principle, financial market entities will have to apply the Act since 18 May 2023. However, many of the changes will enter into force on 18 December 2022, including changes regarding limits on non-interest costs of consumer credit or the minimum share capital of lending institutions. The PFSA's supervision of the activities of lending institutions will begin on 1 January 2024.

For further information please contact CMS experts Ewa Świderska and Patrycja Sikorska-Tuğcu.

[1]   Act of 6 October 2022 on amending laws to counter usury.