Portuguese Government prohibits banks from charging fees on accounts with negative balance

From July 1, all accounts with negative balances fail to pay fees

Portuguese banks will be prevented from charging fees when the customer exceeds the credit allowed from July, according to a decree of the Ministry of Economy which also defines the limits for overdrafts and usury.

The decree was published in a supplement to the end of the day on Thursday, the eve of the holiday, and responds to the announced government's intention to curb the interest on consumer credit and strengthen the rights of consumers.

"This ordinance has been possible to apply some of its provisions to credit agreements in the form of overdraft facility with repayment obligation within one month and to overtaking credit in the total amount of credit extended is less EUR 200 operations with a significant importance in this credit market, "reads the preamble to the statute.

The bill also updates the rules of usury, or excessive interest charged on a loan, and sets the ceilings of the APR (Annual Effective Global rate) of credit agreements in the form of overdraft facility with repayment obligation within one month and the annual rate of overtaking credit.

Now also be considered usurious in particular whose APR credit agreement at the time of conclusion of the contract in a room exceeds the average APR practiced in the previous quarter, for each type of consumer credit contract.

Even when not exceeded this limit, the law defines that this is usury exceed 50% if the average APR on credit agreements for consumers concluded in the previous quarter.

This new scheme, which comes into force on the 1st July, will also prevent the bank or other lender may require fees when the credit allowed is exceeded.


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