A big change for mortgage offices is taking effect. Customers will be more protected

Based on the law adopted on April 14, 2023. Lombard Consumer Loan LawAs January 7, 2024 arrives, companies in the industry and their customers need to take note Big changes. In accordance with newly implemented regulations People who use pawnshop services will be better protectedWhile entrepreneurs will have to meet several formal requirements to continue running their business.

For consumers, the new law means above all else Clearer conditions for obtaining loans In relation to pledging an item in a pawn shop. As Business Insider Polska explains, as of January 7 of this year. The point that grants the loan to the customer is obligated to do so Tell him clearly (on paper) about:

• The amount of the consumer mortgage loan and how it is determined;
• The date and method of payment of this amount;
• The total amount to be paid;
• The total cost of the loan, along with its individual components;
• Company, registered office of the entrepreneur, business address and registration number.

However, this is not the end of the changes. The new law stipulates The minimum contract duration, which will now be 7 daysbut also Maximum amount of additional costs, which the pawn shop charges. This cannot be bypassed 20 percent on the loan amount granted in the first yearWhile in the following years they will not be able to increase by more than 10 points. Percentage in 12 months. The legislator stipulated that it is not permissible to exceed the maximum limit for these costs 45 percent of the consumer pawn loan amount.

At the same time, the law determines the rules for calculating interest. This cannot be bypassed The maximum interest limit stipulated in the Civil Code. This means that the interest charged by the pawn shop will be identical to the “legal” interest, that is, it will be equal to Total reference rate of the National Bank of Poland and 3.5 percentage points. At the beginning of 2024, the central bank’s key interest rate is 5.75 percent, which gives The maximum interest rate is capped at 8.2 percent.

On the more formal side of the new law, pawn shop owners will have to meet several criteria. The most important thing seems to be imposed from above The way of doing business. In order to continue operating the said point, the entrepreneur will have to register his business in the name of Limited liability company or joint stock company.

Entrepreneurs who choose an LLC are required by law to do so Establish a capital of at least PLN 50,000. Zloty. At the same time, members of the Board of Directors, Supervisory Board and Audit Committee as well as liquidators and agents of the company They cannot be legally convicted persons For, among other things, a tax crime or a breakdown of the law relating to forgery of documents.

The next requirement is to get access to Register of pawnshop activities, which will be maintained by the Polish Financial Supervision Authority. This step means including entrepreneurs in the group of obligated institutions, meaning that they must adapt to the provisions related to combating money laundering.

Violation of the described law may result in significant penalties. The most serious seems to be the conclusion of a contract or sale of the subject of a pledge to break the mortgage without the required entry in the KNF register. In this case Entrepreneurs are threatened with an amount of up to PLN 500,000. Fine Polish zloty. Other violations, such as setting the initial price in a way that is inconsistent with the requirements of the law or violating the regulations related to the sale of the mortgaged item. It may result in a fine of up to PLN 100,000. Zloty.