Republic of Latvia Cabinet Regulation No. 691 Adopted 25 October 2016

Regulations Regarding Consumer Credit

Issued pursuant to
Section 8, Paragraph four of the Consumer Rights Protection Law
and Section 7, Paragraph two of the Advertising Law

I. General Provisions

1. This Regulation prescribes:

1.1. the requirements in relation to the advertising content of a consumer credit service;

1.2. the content of the information to be provided prior to entering into a consumer credit agreement (hereinafter - the credit agreement) and the procedures for providing it;

1.3. the conditions for provision of ancillary services;

1.4. the requirements to be brought forward for the credit agreement and the information to be included therein;

1.5. the method for calculating the annual percentage rate of charge;

1.6. the conditions for a foreign currency loan and a variable interest rate loan;

1.7. informing of a consumer during the term of operation of the credit agreement;

1.8. early repayment of a credit and fair reduction of the total costs of the credit;

1.9. the requirements to be applied to certain types of credit agreements;

1.10. the requirements to be set for giving advice;

1.11. the duties of credit intermediaries and representatives of credit intermediaries;

1.12. the legal framework for a consumer crediting against movable property pledge.

2. Terms used in this Regulation:

2.1. total amount payable by consumer - the sum of the total amount of the credit and the total cost of the credit to the consumer;

2.2. annual percentage rate of charge - the total costs of the credit to the consumer, expressed as an annual percentage of the total amount of credit granted to the consumer, including the costs in accordance with Paragraphs 5, 6, and 7 of this Regulation;

2.3. borrowing rate - the interest rate expressed as a fixed or variable percentage applied on an annual basis to the amount of credit drawn down;

2.4. fixed borrowing rate - the only borrowing rate on which the creditor and the consumer agree in the credit agreement for the entire duration of the credit agreement or on several borrowing rates for partial periods using exclusively a fixed specific percentage. If not all borrowing rates are determined in the credit agreement, the borrowing rate shall be deemed to be fixed only for the partial periods for which the borrowing rates are determined exclusively by a fixed specific percentage agreed on the conclusion of the credit agreement. Credit agreements for which the borrowing rate is regularly reviewed in accordance with changes in the index rates (Libor, Euribor or others) indicated in the credit agreement, shall not be considered to be credit agreements with a fixed borrowing rate;

2.5. foreign currency loan - a credit denominated in a currency other than that in which the consumer receives the income or holds the assets from which the credit is to be repaid, or denominated in a currency other than that of the Member State of the European Economic Area in which the consumer is resident;

2.6. total amount of credit - the ceiling or the total sums of the borrowing available to the consumer under a credit agreement;

2.7. member benefit organisations - organisations which have been established for the mutual benefit of its members, do not make profits for any other person than its members, fulfil a social purpose in accordance with the requirements of legal acts, receive and manage investments, provide credit services to its members only, providing credit with an annual percentage rate of charge lower than that prevailing on the market or subject to a ceiling specified by legal acts, and membership in which is restricted to persons residing or employed in a particular location, to employees and retired employees of a particular employer or to persons meeting other criteria specified in legal acts, which determine the existence of a common bond between the members;

2.8. linked credit agreement - a consumer credit agreement which serves exclusively to fully or partly finance an agreement for the supply of specific goods or the provision of a specific service, and these two agreements form a commercial unit. A consumer credit agreement and a contract on delivery of particular goods or provision of a particular service form a commercial unit in the following cases:

2.8.1. the credit is granted to the consumer by the goods manufacturer, seller or service provider;

2.8.2. the credit is granted to the consumer by a third party and the creditor uses the services of the manufacturer, seller or service provider in connection with the conclusion or preparation of the credit agreement; or

2.8.3. the credit is granted to the consumer by a third party and the specific goods or specific service is explicitly specified in the credit agreement; and

2.9. credit intermediary in an ancillary capacity - a manufacturer, seller or service provider whose activity as credit intermediary is not the main purpose of its trade, business or profession.

3. This Regulation shall not apply to:

3.1. credit agreements concluded between an employer and an employee, where the credit is granted free of interest or at an annual percentage rate of charge lower than that prevailing on the market and not offered to the public generally, and if the issuance of credits is not the type of core activity of the employer;

3.2. credit agreements concluded with investment companies or with credit institutions for the purposes of allowing an investor to carry out a transaction relating to one or more of the financial instruments regulated in accordance with the laws and regulations regarding the financial instrument market, where the investment company or credit institution granting the credit is involved in such transaction;

3.3. credit agreements which are the outcome of a settlement reached in court or before another authority specified in laws and regulations;

3.4. credit agreements which apply to covering of a debt in the form of deferred payments without paying the interest rate and other additional payments, except for the credit agreement the repayment of which is secured by an immovable property or the purpose of the credit is to acquire or retain a right in immovable property;

3.5. credit agreements for loans granted to a restricted public in accordance with the procedures laid down in laws and regulations with a general interest purpose and at lower interest rates than those prevailing on the market or free of interest or on other terms which are more favourable to the consumer than those prevailing on the market and at interest rates not higher than those prevailing on the market. Chapters II, III, and V of this Regulation shall be applied to such credit agreements the repayment of which is secured by an immovable property or the purpose of credit is to acquire or retain a right in immovable property;

3.6. such hiring or leasing contracts where an obligation to purchase the object of the contract by the consumer or the right to acquire the object of the contract into ownership is not provided for, or complete or partial disbursement of the value of the object of the contract during the duration of the contract is not provided for; and

3.7. credit agreements according to which credit is granted free of interest and other additional payments, except for payments which are related to credit security. This exception shall not be applied to the credit agreement upon entering into which the consumer is requested to deposit an item as security in the creditor's safe-keeping and where the liability of the consumer is strictly limited to that pledged item. The requirements referred to in Paragraph 13, Sub-paragraphs 14.4, 14.5, and 14.6, as well as in Sub-paragraphs 56.3, 56.5, 56.7, and 56.8 of this Regulation shall also apply to the credit agreements referred to in this Sub-paragraph.

4. The conformity with these Regulations shall be supervised by the Consumer Rights Protection Centre.

II. Calculation of the Annual Percentage Rate of Charge

5. The annual percentage rate of charge shall be calculated in accordance with the formula and terms set out in Annex 1 to this Regulation, equating to the present value of all commitments (drawdowns, repayments and charges), future or existing, agreed by the creditor and the consumer.

6. In order to calculate the annual percentage rate of charge, the total cost of the credit to the consumer shall be determined. When calculating the total cost of the credit to the consumer, the following charges shall not be taken into account:

6.1. any charges payable by the consumer for non-compliance or inadequate compliance with any of the commitments laid down in the credit agreement; and

6.2. charges which, for purchases of goods or services, except the purchase price, the consumer pays, irrespective of whether the transaction is effected in cash or on credit.

7. The costs of maintaining an account used for payment transactions and drawdowns, as well as the costs of using a means of payment for payment transactions and drawdowns, and other costs relating to payment transactions shall be included in the total cost of the credit to the consumer, except where the opening of the account is optional and the costs of the account are clearly and separately shown in the credit agreement or in any other agreement concluded with the consumer.

8. The calculation of the annual percentage rate of charge shall be based on the assumption that the credit agreement is to remain valid for the period agreed and that the creditor and the consumer will fulfil their obligations under the terms and by the dates agreed by the parties in the credit agreement.

9. In a credit agreement allowing variations in the annual percentage rate of charge or other charges contained in the annual percentage rate of charge but unquantifiable at the time of calculation, the annual percentage rate of charge shall be calculated on the assumption that the borrowing rate and other charges remain fixed and will remain applicable until the end of the credit agreement.

10. In calculating the annual percentage rate of charge, the creditor has the right to use the additional assumptions referred to in Paragraphs 3 and 4 of Annex 1 to this Regulation.

11. For credit agreements the repayment of which is secured by an immovable property or the purpose of the credit is to acquire or retain a right in immovable property, for which the fixed borrowing rate has been determined for the initial time period of at least five years at the end of which an agreement regarding a new fixed borrowing rate for the subsequent time period is intended, the calculation of the additional descriptive annual percentage rate of charge indicated in the European Standardised Information Sheet (Annex 2) shall apply only to the time period of the initial fixed borrowing rate, and it shall be based on an assumption that the credit not repaid at the end of the time period of the fixed borrowing rate has been repaid.

12. If the credit agreement the repayment of which is secured by an immovable property or the purpose of the credit is to acquire or retain a right in immovable property allows changes in the borrowing rate, the consumer must be informed regarding the potential impact of changes on the payments to be made by the consumer and on the annual percentage rate of charge at least using the European Standardised Information Sheet (Annex 2). Additional annual percentage rate of charge which shows the potential risks related to essential increase in the borrowing rate, shall be calculated for the consumer. If the maximum limit of the borrowing rate has not been determined, a warning shall be added to such information that the total costs of credit which are shown by the annual percentage rate of charge, may change. This Paragraph shall not be applied to credit agreements to which Paragraph 11 of this Regulation applies.

III. Requirements for Advertising Credit Services

13. The following is prohibited in an advertisement offering a consumer credit:

13.1. the encouraging of irresponsible borrowing. When determining whether an advertisement encourages irresponsible borrowing, the overall content and the way it is presented, its design and the information provided in the advertisement regarding the credit service which enables the consumer to take an economically justified decision, shall be taken into consideration. The following advertisement shall be considered as advertisement encouraging irresponsible borrowing in any case which:

13.1.1. invites a consumer to take a credit in unconsidered way or without assessment its necessity;

13.1.2. invites to take a credit regardless of the financial situation of the consumer;

13.1.3. causes or may cause an impression that taking of a credit is risk-free;

13.1.4. causes or may cause an impression that a credit is the most appropriate way how to solve financial problems;

13.1.5. influences or may influence the decision of the consumer on concluding the credit agreement by additionally offering to acquire goods or receive services or other advantages if they have no direct relation to the use of the credit;

13.2. the provision of information regarding the option of receiving credit to persons with a poor credit history.

14. An advertisement offering a consumer credit and indicating the interest rate or other numerical information regarding credit charges, in a clear, concise and prominent way by means of a representative example, shall indicate the following (unless it is otherwise determined in specific credit agreements):

14.1. the borrowing rate (fixed, variable or both) together with information regarding the applicable charges included in the total cost of the credit to the consumer;

14.2. the total amount of the credit;

14.3. the annual percentage rate of charge. Such information shall be indicated in a visual advertisement in at least as clearly prominent way as any interest rate or other equivalent numerical information regarding the credit charges;

14.4. the duration of the credit agreement, if applicable;

14.5. in the case of a credit in the form of deferred payment for specific goods or services, the price of the goods or services and the amount of any initial payment;

14.6. the total amount payable by the consumer and the amount of the instalments, where possible; and

14.7. a compulsory requirement to undertake an ancillary service related to the credit agreement, such as compulsory insurance, if the conclusion of an agreement for an ancillary service is required in order to receive credit or receive it with the terms and conditions offered, and the charges of the service referred to cannot be determined in advance.

15. At least the information referred to in Sub-paragraphs 14.1, 14.2, and 14.3 of this Regulation shall be indicated, by means of a representative example, in an advertisement for overdraft credit to be repaid upon request or within three months, if the advertisement has been formulated indicating the interest rate or other numerical information regarding the credit charges.

16. The information referred to in Sub-paragraphs 14.1, 14.2, 14.3, 14.4, 14.5, 14.6 (if applicable), and 14.7 of this Regulation shall be indicated, by means of a representative example, in an advertisement regarding the credit agreement for the purchase of immovable property or the credit agreement repayment of which is secured by an immovable property mortgage, if the advertisement has been formulated indicating the interest rate or other numerical information regarding the credit charges, as well as:

16.1. the name of the creditor or credit intermediary or the representative of the credit intermediary. If the credit intermediary or representative of the credit intermediary involved is a natural person, the given name, surname and registration number in the register of intermediaries shall be indicated;

16.2. a clear reference that the credit is secured by an immovable property mortgage or other rights in relation to the immovable property;

16.3. if applicable, the number of payments to be made;

16.4. if applicable, a warning that currency fluctuations may affect the amount to be paid by the consumer.

17. The information referred to in Sub-paragraphs 14.1, 14.2, 14.4, 14.5, and 14.6 of this Regulation shall be indicated, by means of a representative example, in an advertisement regarding a credit agreement, in accordance with which the consumer is required to repay the credit in a time period not exceeding three months and negligible additional payments are requested for the use of credit in comparison with the total amount of the credit and the duration of the credit agreement, if the advertisement has been formulated indicating the interest rate or other numerical information regarding the credit charges.

18. The information referred to in Sub-paragraphs 14.1, 14.2, 14.4, and 14.6 of this Regulation shall be indicated, by means of a representative example, in an advertisement regarding the credit agreement, upon the conclusion of which the consumer is requested to deposit an item as security in the creditor's safe-keeping and where the liability of the consumer is strictly limited to that pledged item, if the advertisement has been formulated indicating the interest rate or other numerical information regarding the credit charges.

19. Only the requirements referred to in Paragraph 13 of this Regulation shall apply to such advertisement for a consumer credit agreement, in accordance with which the creditor has consented by acquiescence that the consumer uses funds exceeding the balance of funds remaining in the consumer's settlement account or the granted overdraft facility.

IV. Information to be Provided to a Consumer Before Concluding a Credit Agreement

20. Before a consumer has undertaken obligations of the credit agreement or accepted an offer, the creditor or credit intermediary shall, on the basis of the credit terms and conditions offered by the creditor and the preferences expressed and information supplied by the consumer, if the consumer has provided such, provide the consumer with the information needed to compare different offers in order to take an informed decision on whether to conclude the credit agreement.

21. The following shall be indicated in the information provided to a consumer in accordance with Paragraph 20 of this Regulation:

21.1. the type of credit;

21.2. the name, registration number, legal address and address of the actual provision of services, if different from the legal address, of the creditor and, if a credit intermediary is involved, the credit intermediary. If the credit intermediary involved is a natural person, the given name, surname, declared place of residence and address of the actual provision of services shall be indicated;

21.3. the total amount of credit and the conditions governing the drawdown;

21.4. the duration of the credit agreement;

21.5. the good or service and the price thereof, if, in accordance with the credit agreement, it is intended to grant a loan in the form of deferred payment for the specific good or service or it is anticipated to conclude the linked credit agreement;

21.6. the borrowing rate, the conditions governing the application of the borrowing rate, and the index rate, if such is applied to the initial borrowing rate, as well as the periods, conditions and procedure for changing the borrowing rate. If different borrowing rates are applied to the credit, the abovementioned information shall be shown on all the applicable rates;

21.7. the annual percentage rate of charge and the total amount payable by the consumer. The abovementioned information shall be illustrated by means of a representative example indicating all the assumptions used for calculation of the annual percentage rate of charge. Where the consumer has informed the creditor of one or more components of the preferred credit, the creditor shall take the components indicated by the consumer into account in the example. If a credit agreement provides different ways of drawdown with different charges or borrowing rates and the creditor uses the assumption set out in Annex 1, Sub-paragraph 3.2 to this Regulation in the calculation of the annual percentage rate of charge, he shall indicate that other drawdown mechanisms for this type of credit agreement may result in higher annual percentage rate of charges;

21.8. the amount, number and frequency of payments to be made by the consumer, as well as the procedure by which payments will be allocated to different outstanding balances charged at different borrowing rates for the purpose of reimbursement (if such procedure is specified);

21.9. the charges for maintaining one or several accounts recording both payment transactions and drawdowns, indicating the charges for using a means of payment for both payment transactions and drawdowns, any other charges deriving from the credit agreement and the conditions under which those charges may be changed. The information referred to shall not be indicated if the opening of the account in accordance with the credit agreement is optional or is not provided for;

21.10. the notarial costs payable by the consumer on conclusion of the credit agreement (if such are anticipated);

21.11. the obligation to enter into an ancillary service contract relating to the credit agreement, for example, mandatory insurance, where the conclusion of such a contract is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed;

21.12. the interest rate in the case of late payments and the procedures for the application thereof, as well as any penalties or other compensation for the non-compliance or inadequate compliance with the contractual obligations (if such are anticipated);

21.13. information regarding the consequences of missing payments;

21.14. the sureties, where applicable;

21.15. information on the right of withdrawal from the credit agreement;

21.16. the right of early repayment of the credit and information concerning the creditor's right to compensation and the procedures by which that compensation will be determined in accordance with Paragraph 101 of this Regulation (if such is anticipated);

21.17. the consumer's rights to be informed immediately and free of charge, in compliance with the Consumer Rights Protection Law, of the use of a database for the purposes of assessing the ability of the consumer to repay the credit;

21.18. the consumer's right to be supplied, on request and free of charge, with a copy of the draft credit agreement; and

21.19. the period of time during which the creditor is bound by the information provided prior to entering into contract.

22. The information referred to in Paragraph 21 of this Regulation shall be provided in conformity with the Standard European Consumer Credit Information form included in Annex 3 to this Regulation on paper or using another durable medium. All the information referred to is required to be equally visible. The creditor has fulfilled the information requirements in compliance with this Paragraph and the requirements specified in the regulations on distance contracts for the provision of financial services for informing the consumer prior to the conclusion of a distance contract for financial services, if he has provided information to the consumer in compliance with the form referred to.

23. Other information not indicated in Paragraph 21 of this Regulation, which is provided by the creditor to the consumer, shall be included in a separate document to be appended to the Standard European Consumer Credit Information form included in Annex 3 to this Regulation.

24. The requirements referred to in Paragraphs 20, 21, 22, and 23 of this Regulation shall not apply to:

24.1. credit agreements which provide that the consumer is required to repay the credit in a time period not exceeding three months and with which negligible additional payments are requested for the use of credit in comparison with the total amount of the credit and the duration of the credit agreement;

24.2. credit agreements in accordance with which the creditor has consented by acquiescence that the consumer uses funds which exceed the balance of funds in the consumer's settlement account or the overdraft facility granted.

25. For credit agreements upon the conclusion of which the consumer is requested to deposit an item as security in the creditor's safe-keeping and where the liability of the consumer is strictly limited to that pledged item before the consumer has undertaken the liabilities of the credit agreement or agreed to the offer, the creditor shall provide the information indicated in Sub-paragraphs 21.3, 21.4, 21.6 of this Regulation in free form, as well as the information regarding the total amount to be paid by the consumer.

26. Upon request by the consumer, the creditor shall issue a draft copy of the credit agreement free of charge, except where the creditor does not wish to conclude a credit agreement with the consumer at the time of the request being expressed.

27. If voice telephony has been used as a means of communication between the creditor and consumer in accordance with the regulations on distance contracts for the provision of financial services, the description of financial services to be provided in accordance with the abovementioned regulations shall include at least the information referred to in Sub-paragraphs 21.3, 21.4, 21.5, 21.6, and 21.8 of this Regulation, as well as information regarding annual percentage rate of charge illustrated by means of a representative example and the total amount to be paid by the consumer.

28. If the agreement has been concluded at the consumer's request using a means of distance communication which does not enable the information to be provided in accordance with Paragraphs 20, 21, 22,and 23 of this Regulation, the creditor shall provide the consumer with the information specified using the Standard European Consumer Credit Information form (Annex 3) immediately after the conclusion of the credit agreement.

29. Upon concluding the credit agreement under which payments made by the consumer are not directed for an immediate repayment of the total amount of credit, but are used to accumulate capital in accordance with time periods and conditions laid down in the credit agreement or in an ancillary agreement, the information which in accordance with the requirements of Paragraphs 20, 21, 22, and 23 of this Regulation must be provided to the consumer prior to entering into the credit agreement, shall include a clear and concise statement that such credit agreement does not provide for a guarantee of repayment of the total amount of credit issued in accordance with the credit agreement, except the case when such a guarantee is given.

30. In order to enable the consumer to assess whether the proposed credit agreement is adapted to his needs and to his financial situation, the creditor or credit intermediary shall explain to the consumer, upon his or her request, the information included in the Standard European Consumer Credit Information form (Annex 3), as well as the essential characteristics of the services proposed and the consequences which may arise to the consumer, caused due to the non-compliance or inadequate compliance with the agreement.

V. Information to be Provided to a Consumer Prior to Concluding a Credit Agreement Regarding a Credit the Repayment of which is Secured by an Immovable Property or the Purpose of which is to Acquire or Retain a Right in Immovable Property

31. A creditor or credit intermediary shall ensure that the consumer has access, at any time, to general information in a clear an concise form, free of charge, regarding credit agreements on paper, using durable medium, or electronically. At least the following shall be indicated in the abovementioned information:

31.1. the name, registration number, legal address and actual address of the provision of services, if different from the legal address, of the provider of information. If the provider of information is a natural person, the given name, surname, address of the declared place of residence and actual address of the provision of services, as well as the number in the register of credit intermediaries, if the natural person is a credit intermediary, shall be indicated;

31.2. the possible purposes for which the credit may be used;

31.3. the types of security, including information regarding the possibility of the security to be located in another Member State of the European Economic Area;

31.4. the possible terms of operation of credit agreements;

31.5. the types of available borrowing rates by indicating whether this is fixed or variable or a combination of both, adding a short description of characteristics of the fixed and variable interest rates, including the impact on the consumer related thereto;

31.6. if a loan in foreign currency is available - information regarding the foreign currency or currencies, including an explanation as to what is the impact of the credit expressed in a foreign currency on the consumer;

31.7. the total amount of the credit in the form of a representative example, the total charges of the credit for the consumer, the total amount to be paid by the consumer, and the annual percentage rate of charge;

31.8. the possible further costs which are not included in the total charges of the credit for the consumer and which must be paid in relation to the credit agreement;

31.9. different possibilities for repayment of the credit to the creditor, including the amount, number and frequency of the possible regular payments to be made by the consumer;

31.10. in the relevant case a clear and concise reference that conformity with the provisions of the credit agreement does not guarantee repayment of the total amount of the credit issued according to the credit agreement;

31.11. information regarding the conditions for early repayment of the credit;

31.12. information regarding the necessity to perform an evaluation of the immovable property, regarding the party responsible for the performance of the evaluation, as well as regarding whether it causes any costs for the consumer;

31.13. a reference regarding the obligation to conclude an ancillary service contract relating to the credit agreement, if the conclusion of such a contract is compulsory in order to obtain the credit or to obtain it on the terms and conditions marketed. Where applicable, an explanation shall be appended that ancillary services may be acquired from a service provider other than the creditor;

31.14. a general warning regarding the consequences, if the liabilities arising from the credit agreement are not fulfilled.

32. Before the consumer has undertaken the liabilities of the credit credit agreement or offer, the creditor, credit intermediary or representative of the credit intermediary shall, on the basis of the information provided by the consumer regarding his or her needs, financial situation and preferences, without undue delay and free of charge, provide personalised information to the consumer which is necessary in order to compare different offers, assess their impact, and take a conscious, informed decision on whether to conclude agreement.

33. The personalised information referred to in Paragraph 32 of this Regulation shall be provided in conformity with the European Standardised Information Sheet included in Annex 2 to this Regulation on paper or using another durable medium. All the information referred to is required to be equally visible. The creditor, credit intermediary or representative of the credit intermediary has fulfilled the information requirements in conformity with this Paragraph and the requirements specified in the regulations regarding distance contracts for the provision of financial services for informing the consumer prior to the conclusion of a distance contract for financial services, if he has provided information to the consumer in conformity with the abovementioned Sheet prior to concluding the credit agreement.

34. Other information other than indicated in the Sheet included in Annex 2 to this Regulation and which is provided by the creditor, credit intermediary or representative of the credit intermediary to the consumer, shall be included in a separate document to be appended to the Sheet included in Annex 2 to this Regulation.

35. If an offer is given to a consumer which is binding to the creditor, it shall be provided on paper or using another durable medium by appending the Sheet referred to in Annex 2 to this Regulation, if it has not already been previously issued to the consumer or the characteristics of the offer are different from the information indicated in the Sheet issued previously.

36. If an offer is given to a consumer which is binding to the creditor, the creditor, credit intermediary or representative of the credit intermediary shall offer to issue a copy of the draft credit agreement to the consumer free of charge.

37. If voice telephony is used as means of communication with the consumer in accordance with the regulations regarding distance contract for the provision of financial services, at least the information referred to in Part 1, Paragraphs 3, 4, 5, and 6 of Annex 2 to this Regulation shall be included in the description of financial services to be provided in accordance with the abovementioned regulations.

38. In order to enable the consumer to assess whether the proposed credit agreement and ancillary services proposed are adapted to his needs and to his financial situation, the creditor, credit intermediary or representative of the credit intermediary shall, upon request of the consumer, explain to the consumer the information to be provided to the consumer in accordance with this Chapter and Annex 2, as well as the essential characteristics of the services proposed and the consequences which may be caused for the consumer by use of the services, including inform regarding the consequences arising from the non-performance or inadequate performance of the agreement.

39. If the credit agreement is offered together with ancillary services, information shall be provided to the consumer as to whether it is possible to terminate the operation of each additional ancillary service contract individually, as well as the impact of such termination on the consumer.

40. The credit intermediary or representative of the credit intermediary shall provide the information referred to in Chapter XIV of this Regulation to the consumer.

VI. Information On Overdraft Credit, Credit Agreements Concluded by Member Benefit Organisations and Credit Agreements for the Fulfilment of Initial Credit Agreement Obligations to be Provided to a Consumer Prior to the Conclusion of a Credit Agreement

41. Before a consumer is bound by a credit agreement or offer in relation to overdraft credits to be repaid on demand or within three months, as well as to the credit agreements referred to in Paragraph 44 of this Regulation, the creditor or credit intermediary, in good time, on the basis of the credit terms and conditions offered by the creditor and, if applicable, the preferences expressed and information supplied by the consumer, if any, shall provide the consumer with the information needed to compare different offers in order to take an informed decision on whether to conclude a credit agreement.

42. The following shall be indicated in the information referred to in Paragraph 41 of this Regulation:

42.1. the type of credit;

42.2. the name, registration number, legal address and address of the actual provision of services, if different from the legal address, of the creditor and, if a credit intermediary is involved, the credit intermediary. If the credit intermediary involved is a natural person, the given name, surname, declared place of residence and address of the actual provision of services shall be indicated;

42.3. the total amount of the credit;

42.4. the duration of the credit agreement;

42.5. the borrowing rate, the conditions governing the application of that rate, any index rate applicable to the initial borrowing rate, the charges applicable from the time the credit agreement is concluded and the conditions under which those charges may be changed, if the change in charges is permitted;

42.6. the annual percentage rate of charge illustrated by means of a representative example indicating all the assumptions used for calculation of the abovementioned rate;

42.7. the procedure for terminating the credit agreement;

42.8. for overdraft credit agreements to be repaid on demand or within three months, an indication shall be included that the consumer may be requested to repay the amount of the credit in full at any time, if this condition is applicable to the specific credit;

42.9. the interest rate in the case of late payments and the procedures for the application thereof, as well as any penalties or other compensation for the non-compliance with the contractual obligations (if any);

42.10. the consumer's rights to be informed immediately and free of charge, in compliance with the Consumer Rights Protection Law, of the use of a database for the purposes of assessing the ability of the consumer to repay the credit;

42.11. for overdraft credit agreements to be repaid on demand or within three months, information shall be indicated regarding the charges applicable from the time the agreement is concluded and the conditions by which these charges may be changed (if the change in charges is permitted); and

42.12. the period of time during which the creditor is bound by the information provided prior to entering into contract (if such is specified).

43. The information referred to in Paragraph 42 of this Regulation shall be provided in compliance with the Standard European Consumer Credit Information form included in Annex 4 to this Regulation on paper or using another durable medium. All the abovementioned information is required to be equally visible. The creditor has fulfilled the information requirements in compliance with this Paragraph and the requirements specified in the regulations on distance contracts for the provision of financial services for informing the consumer prior to the conclusion of a distance contract for financial services, if he has provided information to the consumer in compliance with the form referred to.

44. For credit agreements which have been concluded by member benefit organisations, as well as credit agreements in which the creditor and the consumer have agreed on the procedure for repayment, if the consumer has not honoured the initial credit agreement obligations, and such procedure would prevent potential court proceedings for not honouring the obligations specified in the consumer credit agreement, and, therefore, less favourable terms than those specified in the initial consumer credit agreement would not apply to the consumer, the following information shall be indicated in addition to the information referred to in Paragraph 42 of this Regulation:

44.1. the amount, number and frequency of payments to be made by the consumer, as well as the procedure by which payments will be allocated to different outstanding balances charged at different borrowing rates for the purpose of reimbursement (if such procedure is specified);

44.2. the right of early repayment of the credit and information concerning the creditor's right to compensation and the procedures by which that compensation shall be determined in accordance with Paragraph 101 of this Regulation (if any).

45. If voice telephony has been used as a means of communication between the creditor and the consumer and the consumer is requesting immediate access to overdraft credit, at least the information referred to in Sub-paragraphs 42.3, 42.5, 42.6, and 42.8 of this Regulation shall be included in the characteristics of the financial services. The creditor shall also provide this information regarding overdraft credit to be repaid within one month. In addition to the characteristics of the credit agreements referred to in Paragraph 44 of this Regulation, the duration of the credit agreement shall also be included.

46. If an agreement has been concluded upon request of the consumer, using a distance means of communication which does not enable information to be provided in accordance with Paragraphs 41, 42, 43, and 44 of this Regulation, the creditor shall provide the consumer with information regarding the credit agreement in accordance with Chapter VIII of this Regulation, insofar as it is applicable, immediately after the conclusion of the credit agreement.

47. Upon request of the consumer, the creditor shall issue a draft copy of the credit agreement containing information in accordance with Chapter VIII of this Regulation, insofar as it is applicable. This provision shall not be applied if the creditor at the time of the request does not wish to conclude a credit agreement with the consumer.

VII. Requirements to be Brought Forward for Advisory Services

48. Advice may be provided by creditors, credit intermediaries or representatives of credit intermediaries only. The creditor, credit intermediary or representative of the credit intermediary shall, prior to providing advice or accordingly prior to entering into a contract regarding provision of advisory service, explicitly inform the consumer as to whether the consumer is being provided or may be provided advice, as well as shall provide the following information free of charge - as additional information to the pre-contractual information provided for in Chapter IV, V or VI of this Regulation - on paper or using another durable medium:

48.1. whether the advice will be based on considering only the product range of the creditor, credit intermediary or representative of the credit intermediary or a wide range of products from across the market so that the consumer can understand the basis on which the advice is made;

48.2. where applicable, the fee to be paid by the consumer for the advisory service or, where the amount cannot be ascertained at the time of provision of the information, the method used for its calculation.

49. Creditors, credit intermediaries or representatives of the credit intermediary shall obtain the necessary information regarding the consumer's personal situation and financial standing, his preferences and objectives so as to enable the recommendation of suitable credit agreements. Such an assessment shall be based on information that is up to date at that moment in time and shall take into account reasonable assumptions as to risks to the consumer's situation during the term of operation of the proposed credit agreement.

50. Creditors, credit intermediaries which are tied to one creditor only, one group of companies of the creditor or several creditors or their groups of companies which do not represent the largest part of the credit service market (hereinafter - the tied credit intermediaries) or representatives of the tied credit intermediaries shall consider a sufficiently large number of credit agreements available in their range of credit services and recommend a suitable credit agreement or several suitable credit agreements for the consumer's needs, financial standing and personal situation.

51. Credit intermediaries or representatives credit intermediaries which are not deemed to be the tied credit intermediaries within the meaning of Paragraph 50 of this Regulation, shall consider a sufficiently large number of credit agreements available on the market and recommend a suitable credit agreement or several suitable credit agreements available on the market for the consumer's needs, financial standing and personal situation.

52. Creditors, credit intermediaries or representatives of credit intermediaries shall act in the best interests of the consumer by informing themselves about the consumer's needs and circumstances and recommending suitable credit agreements, and shall give the consumer a record on paper or on another durable medium of the recommendation provided.

53. The creditor, credit intermediary or representative of the credit intermediary shall warn the consumer if the credit agreement may cause special risk to the consumer due to the financial standing of the consumer.

54. The use of the term "independent advising" and "independent advice" or similar terms shall be permitted if the creditor, credit intermediary or representative of the credit intermediary considers a sufficiently large number of credit agreements available on the market and is not remunerated for those advisory services by one or more creditors.

55. The provisions of this Chapter shall not affect the duty of creditors, credit intermediaries or representatives of credit intermediaries to provide explanations to the consumer regarding the information to be provided to the consumer in accordance with the requirements of this Regulation.

VIII. Information to be Included in the Credit Agreement

56. The following shall be clearly and concisely indicated in the credit agreement (if it has not been specified otherwise for particular types of credit agreement):

56.1. the type of credit;

56.2. the name, registration number, legal address of the creditor and the credit intermediary, if a credit intermediary is involved, the consumer and the address thereof. If the credit intermediary involved is a natural person, the given name, surname, declared place of residence and address of the actual provision of services shall be indicated;

56.3. the duration of the credit agreement;

56.4. the total amount of the credit and the conditions governing the drawdown;

56.5. the good or service and the price thereof, if, in accordance with the credit agreement, it is intended to grant a loan in the form of deferred payment for the specific good or service or it is anticipated to conclude the linked credit agreement;

56.6. the borrowing rate, the conditions governing the application of the borrowing rate, and the index rate, if such is applied to the initial borrowing rate, as well as the periods, conditions and procedures for changing the borrowing rate. If different borrowing rates are applied in different circumstances, the information referred to in respect of all the rates applicable shall be indicated in the credit agreement;

56.7. the annual percentage rate of charge and total amount payable by consumer, which is calculated at the time of concluding the credit agreement, mentioning the assumptions used in the calculation of the annual percentage rate of charge;

56.8. the amount, number and frequency of payments to be made by the consumer, as well as the procedures by which payments will be allocated to different outstanding balances charged at different borrowing rates for the purpose of reimbursement (if such procedure is specified);

56.9. the consumer's right to receive, on request and free of charge, at any time throughout the duration of the credit agreement, a statement of account with a credit repayment table on paper or using other durable medium, on which the parties have agreed in the credit agreement if the repayment of the total credit amount is specified in the credit agreement within a specified time period. The payments to be made by the consumer, the periods and conditions relating to the payment thereof shall be indicated in the credit repayment table. The table shall contain a breakdown of each repayment showing the repayment of the total credit amount, the interest calculated on the basis of the borrowing rate and any additional costs if such are provided for in the credit agreement. Where the interest rate is not fixed or the additional costs may be changed under the credit agreement, the credit repayment table shall indicate, clearly and concisely, that the data contained in the table will remain valid only until such time as the borrowing rate or the additional costs are changed in accordance with the credit agreement;

56.10. a statement showing the periods and conditions for the payment of the interest and of any associated recurrent and non-recurrent charges, if charges and interest are to be paid without capital amortisation in accordance with the credit agreement;

56.11. if the credit agreement provides for the mandatory opening of an account, the charges for maintaining one or several accounts recording both payment transactions and drawdowns, indicating the charges for using a means of payment for both payment transactions and drawdowns, any other charges deriving from the credit agreement and the conditions under which those charges may be changed;

56.12. the interest rate applicable in the case of delayed payments at the time of the conclusion of the credit agreement and the procedures for the application thereof and the penalty or other compensation for non-compliance or inadequate compliance of contractual obligations (if such is provided for);

56.13. information on the consequences of missing payments;

56.14. the duty to pay notarial costs (if such are anticipated);

56.15. the sureties and insurance (if such is necessary);

56.16. information on the right of withdrawal from the credit agreement, the period during which the right of withdrawal may be exercised and other conditions governing the exercise of the rights referred to, including information concerning the obligation of the consumer to repay the amount of credit received to the creditor and the interest in accordance with the Consumer Rights Protection Law, as well as the amount of interest payable per day;

56.17. information concerning the consumer claims specified in Section 31 of the Consumer Rights Protection Law related to customer credit for the purchase of goods or services, as well as the conditions for the exercise of these rights;

56.18. information concerning the right of early repayment of the credit, the procedure for early repayment, as well as information concerning the creditor's right to compensation and the procedures by which that compensation will be determined in accordance with Paragraph 101 of this Regulation (where applicable);

56.19. the procedure to be followed in exercising the right of termination of the credit agreement;

56.20. information concerning the mechanism for examining out-of-court disputes for the consumer and the opportunities for having access thereto (if such is anticipated);

56.21. other contractual terms and conditions (where applicable); and

56.22. the name and address of the supervisory authority.

57. In the case referred to in Sub-paragraph 56.9 of this Regulation the creditor shall make available to the consumer, free of charge and at any time throughout the duration of the credit agreement, a statement of account in the form of a credit repayment table.

58. In the case of a credit agreement under which payments made by the consumer do not give rise to an immediate corresponding amortisation of the total amount of credit, but are used to constitute capital during periods and under conditions laid down in the credit agreement or in an ancillary agreement, the creditor shall include a clear and concise statement in the information referred to in Paragraph 56 of this Regulation that such credit agreements do not provide for a guarantee of repayment of the total amount of credit drawn down under the credit agreement, unless such a guarantee is given.

59. The following shall be clearly and concisely indicated in the agreement for overdraft credit to be repaid on request or within three months:

59.1. the type of credit;

59.2. the name, registration number, legal address of the creditor and the involved credit intermediary, the consumer and the address thereof. If the credit intermediary involved is a natural person, the given name, surname, declared place of residence and address of the actual provision of services shall be indicated;

59.3. the duration of the credit agreement;

59.4. the total amount of the credit and the conditions governing the drawdown;

59.5. the borrowing rate, the conditions governing the application of the borrowing rate, and the index rate, if such is applied to the initial borrowing rate, as well as the periods, conditions and procedures for changing the borrowing rate. If different borrowing rates are applied to the overdraft credit, the abovementioned information shall be indicated in the credit agreement in respect of all the applicable rates;

59.6. the annual percentage rate of charge and the total cost of the credit to the consumer, calculated at the time the credit agreement is concluded. All assumptions used for the calculation of the abovementioned rate in accordance with the definition "total costs of the credit to a consumer" laid down in Section 1 of the Consumer Rights Protection Law and Sub-paragraph 2.2 and Paragraph 6 of this Regulation shall be indicated in the credit agreement;

59.7. an indication that the consumer may at any time, upon request of the creditor, be requested to repay the credit amount in full; and

59.8. information concerning the charges applicable from the time of concluding the overdraft credit agreement and the conditions under which these charges may be changed.

60. In a credit agreement which provides that the consumer is required to repay the credit in a time period not exceeding three months and in accordance with which negligible additional payments are requested for the use of credit in comparison with the total amount of the credit and the duration of the credit agreement, the information referred to in Sub-paragraphs 56.1, 56.2, 56.3, 56.4, 56.5, 56.6, 56.8, 56.11, 56.12, 56.13, 56.14, 56.15, 56.18, 56.19, 56.20, 56.21, and 56.22 of this Regulation, as well as the total amount payable by the consumer shall be indicated.

61. In the credit agreement the repayment of which is secured by an immovable property or the purpose of the credit is to acquire or retain a right in immovable property, the information referred to in Sub-paragraphs 56.1, 56.2, 56.3, 56.4, 56.5, 56.6, 56.7, 56.8, 56.9, 56.10, 56.11, 56.12, 56.13, 56.14, 56.15, 56.16, 56.18, 56.19, 56.20, 56.21, and 56.22 of this Regulation shall be indicated.

62. In the credit agreement upon the conclusion of which the consumer is requested to deposit an item as security in the creditor's safe-keeping and the liability of the consumer is strictly limited to that pledged item, the information referred to in Sub-paragraphs 56.1, 56.2, 56.3, 56.4, 56.6, 56.8, 56.12, 56.13, 56.14, 56.15, 56.18, 56.19, 56.20, 56.21, and 56.22 of this Regulation, as well as the total amount to be paid by the consumer, a detailed description of the pledge which would ensure the identification thereof, an evaluation of the pledge and the liability of the creditor for retaining the pledge throughout the duration of the credit agreement shall be indicated by indicating the insurance company with which the civil liability of the creditor is insured for losses caused to the pledge transferred to the creditor for safe-keeping in accordance with Paragraph 81 of this Regulation as a result of his or her action or failure to act.

63. In a credit agreement concluded by a member benefit organisation, at least the information referred to in Sub-paragraphs 56.1, 56.2, 56.3, 56.4, 56.5, 56.6, 56.7, 56.8, and 56.12 of this Regulation shall be indicated.

64. In a credit agreement in which the creditor and the consumer have agreed on the procedures for repayment, if the consumer has not honoured the initial credit agreement obligations, and such procedures would prevent potential court proceedings for failure to honour the obligations specified in the consumer credit agreement, and, therefore, less favourable terms than those specified in the initial consumer credit agreement would not apply to the consumer, at least the information referred to in Sub-paragraphs 56.1, 56.2, 56.3, 56.4, 56.5, 56.6, 56.7, 56.8, 56.9, 56.12, and 56.18 of this Regulation shall be included. However, if the conditions referred to in Paragraph 59 of this Regulation apply to the credit agreement, only Paragraph 59 of this Regulation shall be applicable.

65. If an agreement has been concluded between the consumer and the creditor regarding the opening of a settlement account with the option that the consumer has the right to use funds exceeding the balance of funds in the settlement account of the consumer or the granted overdraft facility, information regarding the borrowing rate, the conditions governing the application of this rate, the index rate applicable to the initial borrowing rate, the charges applicable from the time of concluding the credit agreement and the conditions under which these charges may be changed, if a change in charges is permitted, shall also be included in the agreement regarding the opening of a settlement account. The requirements referred to in Paragraphs 56, 57, 58, and 59 of this Regulation shall not apply to such agreements.

66. All amendments and supplements to a credit agreement shall be made in writing (on paper or using another durable medium), and they shall be signed on both sides, except amendments arising from the conditions for changing the borrowing rate specified in the credit agreement, if the creditor has informed the consumer of the changes referred to in compliance with Paragraph 90, 91 or 94 of this Regulation.

67. A consumer has a duty to pay only the payments provided for in the credit agreement.

68. The information shown in the credit agreement is required to be equally visible.

IX. Requirements Applicable to Consumer Credit for Pledging Movable Property

69. It shall be permitted to provide a credit service in which it is required to deposit a movable property as security in the creditor's safe-keeping and where the liability of the consumer is strictly limited to that pledged movable property (hereinafter - the pledge) only in a building or part of the building. It is prohibited to organise consumer credit for a pledge in short-term use, temporary and seasonal buildings.

70. The creditor shall ensure the safe-keeping of the pledge deposited thereto for safe-keeping in the storage facility provided for this purpose, ensuring such storage conditions that prevent unauthorised persons from accessing the pledges.

71. The storage facility shall be located in the same building as the customer service area, and it shall be isolated from other premises and customer service areas. The entrance to the storage facility shall not be in the access area of the customers.

72. Large-sized pledges, physically impossible to store in the storage facility referred to in Paragraph 71 of this Regulation, may be stored in another specially equipped space, which may be located in a separate building, or in a car park, ensuring such storage conditions that prevent unauthorised persons from accessing the pledges. The creditor shall ensure twenty-four hour guarding and video surveillance of the storage area of the large-sized pledge, in accordance with Paragraph 73 of this Regulation.

73. The creditor shall conclude one or more contracts with security guard merchants which operate in accordance with the Security Guard Activities Law, in order to ensure that the following conditions are fulfilled in the premises of the credit service provision:

73.1. the building or part of a building referred to in Paragraph 69 of this Regulation, which is used in order to provide the service of consumer credit for pledging movable property, including the storage facility, is equipped with an automatic security and fire alarm system, which is connected to the central security control panel, using not less than two different alarm signal transmission channels;

73.2. continuous internal and external video surveillance of the storage facility, customer service area and entrance takes place, using closed circuit television cameras and performing a video recording in real time mode (the resolution of the video recording shall incorporate not less than 520 TV channels, 25 frames per second, the video recording of each camera having an initial data flow not lower than 184.25 Mb/s, and using H.264/AVC/MPEG-4 Part 10 standard video data compression), ensuring secure safe-keeping of the recording equipment and video recordings in order to prevent illegal disposal thereof. Video recordings shall be stored for at least one month counting from the day of making the video recording;

73.3. credit service provision, pledge acceptance and issuance shall take place in an area with video surveillance;

73.4. informative signs shall be placed by the entrance to the service provision premises, alerting the consumer to the video surveillance; and

73.5. the premises of the credit service provision and storage facility shall be equipped with an emergency alarm button which is connected to the central security control panel of the security guard merchant.

74. It is prohibited to accept as pledge an item:

74.1. for which the creditor cannot ensure the special storage conditions required thereby (special temperature mode, lighting, humidity mode and other conditions), due to which the item may be damaged;

74.2. which has been removed from circulation in the private sector;

74.3. the turnover of which is restricted; or

74.4. the identification number of which, allocated by the manufacturer, has been destroyed or damaged or otherwise encumbered or the identification of the item has been made impossible.

75. The creditor has duty to verify the identity of the person from whom the pledge is being accepted.

76. The creditor must ensure the accounting of the pledges deposited to the safe-keeping thereof by complying with the following conditions:

76.1. the recording shall be performed in electronic form, using an appropriate accounting programme which ensures:

76.1.1. the secure storage of data;

76.1.2. the retaining of the history of any operation performed with data (entry, amendment, review, deletion);

76.1.3. automatic generation of the entry number;

76.1.4. the storage of any appended files, for example, photo images and scanned documents together with the registration entry;

76.1.5. user identification;

76.1.6. performance of a printout of the entries made;

76.2. if the electronic accounting is performed locally (data is not sent online and is stored on a remote server, which ensures the copying of data back-up and remote access to information of the register), written accounting shall also be performed, using a registration journal bound together, stamped, with numbered pages.

77. The following data shall be registered in the accounting system referred to in Paragraph 76 of this Regulation:

77.1. the given name, surname and data of a personal identification document (personal identity number, number of the personal identification document) of the consumer;

77.2. the number of the credit agreement concluded and the date of conclusion;

77.3. the total amount of the credit;

77.4. the pledge evaluation amount;

77.5. a description of the pledge, observing the following conditions:

77.5.1. if precious metals and the products thereof are deposited to the creditor for safe-keeping, the type, proof, weight in grams (with 0.1 g accuracy), a description of the item which ensures the identification thereof, shall be indicated in the accounting by appending a photographic image of the item;

77.5.2. if precious stones and products containing them are deposited to the creditor for safe-keeping, their type and, if possible, weight in carats, as well as a description of the item which ensures the identification thereof, shall be indicated in the accounting by appending a photographic image of the item;

77.5.3. in the accounting of other types of pledges the name of the item, the identification number assigned by the manufacturer, the make, model, a description of the item which ensures the identification thereof, shall be indicated, appending a photographic image of the item;

77.6. the payments made by the consumer in accordance with the credit agreement; and

77.7. the date of the redemption of the pledge or the date of the sale of the pledge, if the pledge is sold to extinguish the debt obligations of the consumer.

78. The data referred to in Sub-paragraphs 77.1, 77.2, 77.3, 77.4, and 77.5 of this Regulation shall be registered in the accounting system immediately after the conclusion of the credit agreement. The data referred to in Sub-paragraph 77.6 of this Regulation shall be registered in the accounting system immediately after the receipt of the payment made by the consumer. The data referred to in Sub-paragraph 77.7 of this Regulation shall be registered in the accounting system immediately after the redemption of the pledge or the sale of the pledge.

79. The pledge accounting data referred to in Paragraph 77 of this Regulation shall be kept for not less than one year from the day of the redemption of the pledge or not less than five years from the day of the sale of the pledge.

80. The creditor shall formulate an identification system for the pledges deposited to the safe-keeping thereof which would ensure unambiguous identification of pledges in conformity with the entry made in the accounting system referred to in Paragraph 76 of this Regulation and the concluded credit agreement.

81. The creditor has a duty to insure his civil liability for the losses caused to the pledge deposited to the creditor for safe-keeping as a result of the action or failure to act thereof. The limit of the abovementioned civil liability insurance for the insurance period shall not be lower than the total amount of the loan issued by the creditor.

X. Additional Requirements for Credit Agreements the Repayment of Which is Secured by an Immovable Property or the Purpose of the Credit is to Acquire or Retain a Right in Immovable Property

82. Offering or selling of the credit agreement in one package with other distinct financial services where the credit agreement is not made available to the consumer separately, is prohibited. The abovementioned prohibition shall not apply to offering of the following financial services to the consumer or his or her family member (parents, grandparents, children, grandchildren, siblings, spouse):

82.1. opening or maintaining a payment or a savings account, where the only purpose of such an account is to accumulate capital to repay the credit, to service the credit, to pool resources to obtain the credit, or to provide additional security for the creditor in the event of default;

82.2. purchasing or keeping an investment product or a private pension product, where such service which primarily offers the investor an income in retirement serves also to provide additional security for the creditor in the event of default or to accumulate capital to repay the credit, to service the credit or to pool resources to obtain the credit;

82.3. concluding a separate credit agreement in conjunction with a shared equity credit agreement to obtain the credit. Within the meaning of this Regulation, a shared equity credit agreement means the credit agreement where the capital to be repaid is based on a contractually set percentage of the value of the immovable property at the time of the capital repayment or repayments;

82.4. purchasing a relevant insurance policy related to the credit agreement where the creditor accepts the insurance policy from other service providers where such policy has a level of guarantee equivalent to the one the creditor has proposed.

83. The prohibition referred to in Paragraph 82 of this Regulation shall not be applicable to cases when the creditor is able to prove to the supervisory authority that the services offered in a package provide a clear benefit to the consumer in comparison to similar services by taking into account the availability and market price of such services.

84. A credit agreement may be offered or sold in a package with other distinct financial services where the credit agreement is made available to the consumer separately. In such case the credit agreement may be offered to the consumer based on the provisions or conditions other than if it is acquired together with ancillary services.

85. Where according to the credit agreement such loan has been granted which was a foreign currency loan at the time of concluding the credit agreement, and where during the term of operation of the credit agreement the remainder from the total amounts payable to the consumer or the amount of regular payments differs by more than 20 % from the case where the currency exchange rate between the currency of the credit agreement and the currency of the Member State applicable at the time of concluding the credit agreement would be applicable, the creditor shall provide the consumer with the right to converting the loan in alternative currency in accordance with the agreement reached in the credit agreement or to use another solution provided for in the credit agreement for limiting the exchange rate risk.

86. The alternative currency referred to in Paragraph 85 of this Regulation in accordance with the agreement reached in the credit agreement may be one or both of the following currencies:

86.1. the currency in which the consumer primarily receives income or holds assets from which the credit is to be repaid, as indicated at the time the most recent creditworthiness assessment in relation to the credit agreement was made;

86.2. the currency of the Member State of the European Economic Area in which the consumer either was resident at the time the credit agreement was concluded or is currently resident.

87. The exchange rate at which the conversion referred to in Paragraph 85 of this Regulation is carried out is the market exchange rate applicable on the day of application for conversion, unless it is otherwise provided for in the credit agreement.

88. Where a consumer has been granted a loan which at the time of concluding the credit agreement is a foreign currency loan, the creditor shall, during the term of operation of the credit agreement, warn the consumer on a regular basis (however not less than once a year) on paper or on another durable medium at least where the value of the total amount to be paid by the consumer which remains outstanding or of the regular instalments varies by more than 20 % from what it would be if the exchange rate between the currency of the credit agreement and the currency of the Member State applicable at the time of the conclusion of the credit agreement were applied. The warning shall inform the consumer of a rise in the total amount to be paid by the consumer, in the relevant case set out therein the right to convert to an alternative currency and the conditions for doing so in accordance with the agreement reached in the credit agreement or the right to use another solution provided for in the credit agreement for limiting the exchange rate risk.

89. Information regarding the measures to be applied in accordance with Paragraphs 85, 86, 87, and 88 of this Regulation shall be provided to the consumer free of charge in the European Standardised Information Sheet included in Annex 2 to this Regulation and in the credit agreement. Where there is no provision in the credit agreement to limit the exchange rate risk to which the consumer is exposed to if a fluctuation in the exchange rate does not exceed 20 %, the European Standardised Information Sheet shall include an illustrative example of the impact of a 20 % fluctuation in the exchange rate.

90. Where the credit agreement is a variable rate credit, the index ratesLibor, Euribor or others) used to calculate the borrowing rate shall be clear, accessible, objective and verifiable by the parties to the credit agreement and the competent authorities. The historical records of index rates for calculating the borrowing rates shall be maintained either by the persons developing the abovementioned rates or the creditors.

XI. Consumer Information

91. If the creditor's rights to amend the borrowing rate are provided for in the credit agreement, the creditor shall, throughout the duration of the credit agreement, individually inform the consumer of any changes to the borrowing rate one month before the coming into effect of the changes, unless otherwise prescribed by other legal acts or if a longer time period is specified in the agreement. Such information shall be provided in writing or using another durable medium, on which the creditor shall agree with the consumer, indicating information concerning the payment amount following the coming into effect of the changes to the borrowing rate, as well as information concerning the changes in the number and frequency of payments.

92. Where the changes to the borrowing rate result from changes which have occurred in the index rate (Libor, Euribor or others) and information concerning the new variable component of the borrowing rate is publicly available, including in the premises of the creditor, the parties may agree in the credit agreement that the abovementioned information is periodically provided to the consumer in conformity with the terms laid down in the credit agreement. Where such credit agreement has been concluded the repayment of which is secured by an immovable property or the purpose of the credit is to acquire or retain a right in immovable property, such information shall be also notified to the consumer individually together with the new amount of regular payments.

93. Where according to the concluded credit agreement the repayment of which is secured by an immovable property or the purpose of the credit is to acquire or retain the right in immovable property, changes in the borrowing rate are determined by way of auction on the capital markets and it is therefore impossible for the creditor to inform the consumer of any change before the change takes effect, the creditor shall, in good time before the auction, inform the consumer on paper or on another durable medium of the upcoming procedure and provide an indication of how the borrowing rate could be affected.

94. If an overdraft credit agreement has been concluded, the creditor shall regularly inform the consumer in the statement of account, in paper form or using another durable medium, on which the parties have agreed in the credit agreement, regarding:

94.1. the exact time period to which the statement of account relates;

94.2. the credit amounts drawn down and the dates of the drawdown thereof;

94.3. the balance of the previous statement of account and the date thereof;

94.4. the new balance;

94.5. the dates and amounts of the payments made by the consumer;

94.6. the borrowing rate applied;

94.7. any charges applied; and

94.8. the minimum amount payable, if any.

95. In addition to that specified in Paragraph 94 of this Regulation, the creditor shall throughout the duration of the overdraft credit agreement, individually inform the consumer of an increase in the borrowing rate or the charges payable in accordance with the credit agreement, one month prior to the coming into effect of these changes, unless otherwise prescribed by other legal acts or unless a longer time period is specified in the agreement. Such information shall be provided in paper form or using another durable medium, on which the creditor and the consumer have agreed. The parties may agree in the credit agreement that the abovementioned information is provided to the consumer in accordance with the procedures laid down in Paragraph 64 of this Regulation, where the changes to the borrowing rate arise from changes which have taken place to the index rate (Libor, Euribor or others), and information concerning the new variable part of the borrowing rate is publicly available, including in the premises of the creditor.

96. If an agreement has been concluded between the consumer and the creditor regarding the opening of a settlement account with the option that the consumer has the right to use funds exceeding the balance of funds in the consumer's settlement account or the granted overdraft facility, the creditor shall regularly provide information to the consumer regarding the borrowing rate, the conditions governing the application of this rate, the index rate which is applied to the initial borrowing rate, the charges applicable from the time of concluding the credit agreement and the applicable conditions, with which these charges may be changed, if a change in charges is permitted. This information shall be provided on paper or using another durable medium.

97. If a credit agreement has been concluded in accordance with which the creditor has consented by acquiescence that the consumer uses funds exceeding the balance of funds in the consumer's settlement account or the granted overdraft facility, in the case of excess spending which lasts for longer than one month, the creditor shall inform the consumer immediately in paper form or using another durable medium of the excess, the amount thereof, the applicable borrowing rate and any applicable penalty or other compensation for the non-compliance or inadequate compliance with contractual obligations, charges or late charges.

98. If the creditor assigns claims arising from the credit agreement to a third party, the creditor shall inform the consumer of the assignment, except cases where the initial creditor who has concluded the agreement with the assignee, continues to service the credit in respect of the consumer or such credit agreement has been concluded in accordance with which the creditor has consented by acquiescence that the consumer uses funds which exceed the balance of funds in the settlement account or the granted overdraft facility.

XII. Early Repayment of Credit

99. A consumer has a duty to pay interest and other charges only for the time period up to which the consumer has fully settled his or her credit obligations in accordance with the credit agreement.

100. The consumer shall inform the creditor in writing regarding the exercising of the right to fulfilment of the credit obligations before the set time period. The parties are entitled to agree in the credit agreement on a time period in which the consumer should inform the creditor.

101. The creditor does not have the right to request compensation for the fulfilment of credit obligations before the specified deadline, except the case specified in Paragraphs 102 and 107 of this Regulation.

102. In the event of early repayment of credit the creditor is entitled to fair and objectively justified compensation for possible costs directly linked to early repayment of credit provided that the early repayment falls within a time period for which the borrowing rate is fixed. Such compensation may not exceed:

102.1. 1% of the amount of credit repaid early, if the period of time between the day of early repayment and the expiry of the credit agreement exceeds one year; or

102.2. 0.5 % of the amount of credit repaid early if the period of time between the early repayment and the expiry of the credit agreement does not exceed one year.

103. The creditor does not have the right to claim the compensation referred to in Paragraph 102 of this Regulation for early repayment, if:

103.1. the amount repaid early does not exceed 9960 euros within 12 months;

103.2. the repayment has been made under an insurance contract intended to provide a credit repayment guarantee;

103.3. the repayment has been performed in accordance with an overdraft credit agreement; or

103.4. the repayment falls within a time period for which the borrowing rate is not fixed.

104. Compensation which is requested in accordance with Paragraph 102 of this Regulation shall not exceed the interest payment which the consumer would have paid in the period between the day of performing the early repayment and the agreed day of the expiry of the concluded credit agreement.

105. The requirements referred to in Paragraphs 102, 103, and 104 of this Regulation shall not apply to credit agreements:

105.1. on the conclusion of which a movable item is to be deposited as security into the safe-keeping of the creditor and the consumer's liability is limited only to the pledged movable item;

105.2. which provide that the consumer is required to repay the credit in a time period not exceeding three months and with which negligible additional payments are requested for the use of credit in comparison with the total amount of the credit and the duration of the credit agreement; and

105.3. in which the creditor and the consumer agree on the procedures for repayment, if the consumer has not honoured the initial credit agreement obligations and such procedures would prevent potential court proceedings for the failure to honour the obligations specified in the initial credit agreement of the consumer.

106. Where the credit agreement the repayment of which is secured by an immovable property or the purpose of the credit is to acquire or retain a right in immovable property has been concluded, the creditor shall provide the consumer without delay after receipt of the request (on paper or on another durable medium) with the information necessary to consider early repayment of the credit. The impact caused to the consumer by his fulfilment of liabilities prior to expiry of the credit agreement shall be calculated in the abovementioned information and all the assumptions used shall be clearly outlined. All the assumptions used shall be commensurate and justified.

107. Where the credit agreement the repayment of which is secured by an immovable property or the purpose of the credit is to acquire or retain a right in immovable property, has been concluded and the consumer exercises the right to the early fulfilment of credit liabilities, carrying out recrediting with another creditor, justified and commensurate compensation for the direct expenses in relation to recrediting may be requested from the consumer, if such have arisen. If the creditor requests a compensation in accordance with Paragraph 102 of this Regulation, the compensation referred to in this Paragraph shall not applicable.

XIII. Termination of an Open-End Credit Agreement

108. A consumer has the right to terminate an open-end credit agreement at any time, in accordance with the procedures specified in the agreement, unless the parties have agreed on a period of notice. Such period shall not exceed one month.

109. If agreement has been reached on this in the credit agreement, the creditor has the right to:

109.1. in accordance with the procedures specified in the agreement to terminate an open-end credit agreement, handing in a notice to the consumer at least two months in advance, in paper form or using another durable medium, on which the parties have agreed in the credit agreement; and

109.2. for objectively justified reasons, terminate the consumer's right to use funds in accordance with the open-end credit agreement informing, where possible before the termination or immediately thereafter, the consumer of the termination and the reasons for it on paper or using another durable medium, unless the provision of such information is prohibited by other directly applicable European Union legal acts which, in accordance with the Treaty on the Functioning of the European Union, should be introduced in the national legal acts, or is not in contravention with the interests of public order or public safety.

110. The requirements referred to in this Chapter shall not apply to overdraft credit agreements to be repaid on demand or within three months and to credit agreements in accordance with which the creditor has consented by acquiescence that the consumer uses funds exceeding the balance of funds in the consumer's settlement account or the granted overdraft credit.

XIV. Duties of Credit Intermediary and Representative of a Credit Intermediary

111. In an advertisement and documentation provided for consumers, the credit intermediary shall indicate his or her extent of authorisation, as well as whether he or she co-operates with one or several creditors or operates as an independent broker.

112. The intermediary shall notify the consumer of the charge which the consumer is required to pay to the credit intermediary for the services provided by him or her (if such is to be paid), and the consumer and the credit intermediary shall agree on this before concluding the credit agreement on paper or using another durable medium.

113. The credit intermediary shall notify the creditor of the charge which the consumer is required to pay to the credit intermediary for the services provided by him or her (if such is to be paid), so that the annual percentage rate of charge may be calculated. Where the credit intermediary charges a fee to the consumer and additionally receives commission for his or her services from the creditor or a third party, the credit intermediary shall explain to the consumer whether or not the commission will be offset against the fee, either in part or in full.

114. Chapters IV, V, and VI of this Regulation shall not apply to manufacturers, sellers or service providers who operate as credit intermediaries in an ancillary capacity. In such case the creditor has a duty to ensure that the consumer receives the information indicated in Chapters IV, V, and VI of this Regulation to be provided to the consumer prior to entering into the agreement.

115. The credit intermediary or representative of the credit intermediary which offers a credit to the consumer the repayment of which is secured by an immovable property mortgage or the purpose of which is to acquire or retain a right on immovable property, in good time before carrying out credit intermediary activities, shall, free of charge, provide at least the following information to the consumer on paper or using another durable medium:

115.1. the name, registration number, legal address and actual address of the provision of services, if different from the legal address, of the credit intermediary. If the credit intermediary involved is a natural person, the given name, surname, declared place of residence and address of the actual provision of services shall be indicated;

115.2. the register in which he has been included, the registration number, where applicable, and the means for verifying such registration;

115.3. information whether the credit intermediary is tied to or works exclusively for one or more creditors providing the names of the creditors for which it is acting. The credit intermediary may disclose that it is independent where it meets the conditions referred to in Paragraph 54 of this Regulation;

115.4. information whether the credit intermediary offers advisory services;

115.5. the fee, if any, to be paid by the consumer to the credit intermediary for its services or, where this is not possible, the method for calculating the fee;

115.6. the procedures allowing consumers or other interested parties to register complaints internally regarding credit intermediaries and, where appropriate, the means by which recourse to out-of-court complaint and redress procedures can be sought;

115.7. the information regarding the existence of the commission or other inducement, if any intended, and the amount thereof to be paid by the creditor or third parties to the credit intermediary for his or her services in relation to the credit agreement. Where the amount is not known at the time of provision of the information, the credit intermediary shall inform the consumer that the actual amount will be indicated at a later stage in the European Standardised Information Sheet included in Annex 2 to this Regulation.

116. Credit intermediaries who are not considered to be the tied credit intermediaries within the meaning of Paragraph 50 of this Regulation but who receive commission from one or more creditors in relation to credits the repayment of which is secured by an immovable property mortgage or the purpose of which is to acquire or retain a right in immovable property, shall, at the consumer's request, provide information free of charge on the variation in levels of commission to be paid by the different creditors providing the credit agreements being offered to the consumer. The consumer shall be informed that he or she has the right to request such information.

XV. Closing Provisions

117. Cabinet Regulation No. 1219 of 28 December 2011, Regulations Regarding Consumer Credit (Latvijas Vēstnesis, 2011, No. 2; 2012, No. 110; 2013, No. 127, 188), is repealed.

118. Chapter V of this Regulation shall be applicable from 1 January 2017.

119. This Regulation shall come into force on 01 November 2016.

Informative Reference to European Union Directives

This Regulation contains legal norms arising from:

1) Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC;

2) Commission Directive 2011/90/EU of 14 November 2011 amending Part II of Annex I to Directive 2008/48/EC of the European Parliament and of the Council providing additional assumptions for the calculation of the annual percentage rate of charge.

3) Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010.

Prime Minister Māris Kučinskis

Deputy Prime Minister,
Minister for Economics Arvils Ašeradens

 

Annex 1
Cabinet Regulation No. 691
25 October 2016

Method for calculating the annual percentage rate of charge

1. The basic equation, which establishes the annual percentage rate of charge and equates, on an annual basis, the present loan on the one hand and the total present value of repayments and payments of charges on the other hand, is as follows:

, where

X - the annual percentage rate of charge;

m - the total number of credit payments;

k - the number of the specific credit drawdown, thus 1 ≤ k ≤ m;

C_k the amount of drawdown k,

t_k - the interval, expressed in years and fractions of a year, between the date of the first drawdown and the date of each subsequent drawdown, thus t₁₌₀;

m' - the number of repayments or payments of charges;

l - the number of the specific repayment or payment of charges;

D_l - the amount of a repayment or payment of charges;

s_l - the interval, expressed in years and fractions of a year, between the date of the first drawdown and the date of each repayment or payment of charges.

2. In calculating the annual percentage rate of charge, the following conditions shall be taken into account:

2.1. the amounts paid by both parties at different times shall not be necessarily equal and shall not be necessarily paid at equal intervals;

2.2. the starting date of the calculation of the percentage rate shall be that of the first drawdown;

2.3. intervals between dates used in the calculations shall be expressed in years or in fractions of a year, and a year shall be presumed to have 365 days (or 366 days for leap years), 52 weeks or 12 equal months (an equal month is presumed to have 30.41666 days (365/12)) regardless of whether or not it is a leap year. Where for credit agreements which have been entered into for the acquisition of an immovable property or the repayment of which is secured by an immovable property mortgage, intervals between dates used in the calculations cannot be expressed as a whole number of weeks, months or years, the intervals shall be expressed as a whole number of one of those periods in combination with a number of days. Where using days:

2.3.1. every day shall be counted, including weekends and holidays;

2.3.2. equal periods and then days shall be counted backwards to the date of the initial drawdown;

2.3.3. the length of the period of days shall be calculated by excluding the first day and including the last day and shall be expressed in years by dividing this period by the number of days (365 or 366 days) of the complete year by counting backwards from the last day to the same day of the previous year;

2.4. the result of the calculation shall be expressed with an accuracy of at least one decimal place (if the figure following the decimal place is greater than or equal to 5, the figure at that particular decimal place shall be increased by one);

2.5. the equation for calculation of the annual percentage rate of charge referred to in Paragraph 1 of this Annex can be rewritten using a single sum and the concept of flows (A_k), which will be positive or negative, (either paid or received during periods l to k, expressed in years):

, where

S - the present balance of flows. If the aim is to maintain the equivalence of flows, the value will be zero.

3. Upon calculating the annual percentage rate of charge (except the annual percentage rate of charge for credit agreements which have been entered into for the acquisition of an immovable property or the repayment of which is secured by an immovable property mortgage), the following additional assumptions may be used:

3.1. if a credit agreement gives the consumer freedom of drawdown, the total amount of credit shall be deemed to be drawn down immediately and in full;

3.2. if a credit agreement gives the consumer freedom of drawdown in general but imposes, amongst the different ways of drawdown, a limitation with regard to the amount and period of time, the amount of credit shall be deemed to be drawn down on the earliest date provided for in the agreement an in accordance with those drawdown limits;

3.3. if a credit agreement provides different ways of drawdown with different charges or borrowing rates, the total amount of credit shall be deemed to be drawn down at the highest charge and borrowing rate applied to the most common drawdown mechanism for this type of credit agreement;

3.4. in the case of an overdraft facility, the total amount of credit shall be deemed to be drawn down in full and for the whole duration of the credit agreement. If the duration of the overdraft facility is not known, the annual percentage rate of charge shall be calculated on the assumption that the duration of the credit is three months;

3.5. in the case of an open-end credit agreement (other than an overdraft facility), which is a credit agreement without fixed duration and includes credits which must be repaid in full within or after a period but, once repaid, become available to be drawn down again, it shall be assumed that:

3.5.1. the credit is provided for a period of 1 year starting from the date of the initial drawdown, and that the final payment made by the consumer clears the balance of capital, interest and other charges, if any;

3.5.2. the capital is repaid by the consumer in equal monthly payments, commencing 1 month after the date of the initial drawdown. However, in cases where the capital must be repaid only in full, in a single payment, within each payment period, successive drawdowns and repayments of the entire capital by the consumer shall be assumed to occur over the period of 1 year. Interest and other charges shall be applied in accordance with those drawdowns and repayments of capital and as provided for in the credit agreement;

3.6. in the case of credit agreements (other than overdrafts and open-end credit agreements referred to in the assumptions set out in Sub-paragraphs 3.4 and 3.5 of this Annex) the following conditions are in effect for the calculation of the annual percentage rate:

3.6.1. if the date or amount of a repayment of capital to be made by the consumer cannot be ascertained, it shall be assumed that the repayment is made at the earliest date provided for in the credit agreement and is for the lowest amount for which the credit agreement provides;

3.6.2. if the date of conclusion of the credit agreement is not known, the date of the initial drawdown shall be assumed to be the date which results in the shortest interval between that date and the date of the first payment to be made by the consumer;

3.7. where the date or amount of a payment to be made by the consumer cannot be ascertained on the basis of the credit agreement or the assumptions set out in Sub-paragraphs 3.4, 3.5 and 3.6, it shall be assumed that the payment is to be made in accordance with the dates and conditions laid down by the creditor. When these are unknown, the annual percentage rate shall be calculated assuming that:

3.7.1. interest charges are repaid together with the repayment payment of the capital;

3.7.2. non-interest charges expressed as a single sum are paid at the date of the conclusion of the credit agreement;

3.7.3. non-interest charges expressed as several payments are paid at regular intervals with equal time base separations commencing with the date of the first repayment of the capital, and if the amount of such payments is not known they shall be assumed to be equal amounts;

3.7.4. the final payment clears the balance of capital, interest and other charges, if any;

3.8. if the parties have not yet agreed on the ceiling applicable to the credit, that ceiling is assumed to be 1500 euros;

3.9. if different borrowing rates and charges are offered for a limited period or amount, the borrowing rate and the charges shall be deemed to be the highest rate for the whole duration of the credit agreement.

3.10. for credit agreements for which a fixed borrowing rate is agreed only in relation to the initial period of operation of the credit agreement at the end of which a new borrowing rate is determined and subsequently periodically adjusted in conformity with an indicator on which the parties have agreed in the credit agreement, the calculation of the annual percentage rate of charge shall be based on the assumption that at the end of the fixed borrowing rate period the borrowing rate is the same as at the time of calculating the annual percentage rate of charge based on the value of the indicator at that time on which the parties have agreed in the credit agreement.

4. Upon calculating the annual percentage rate of charge for credit agreements which have been entered into for the acquisition of an immovable property or the repayment of which is secured by an immovable property mortgage, the following additional assumptions may be used:

4.1. if a credit agreement gives the consumer freedom of drawdown, the total amount of credit shall be deemed to be drawn down immediately and in full;

4.2. if a credit agreement provides different ways of drawdown with different charges or borrowing rates, the total amount of credit shall be deemed to be drawn down at the highest charge and borrowing rate applied to the most common drawdown mechanism for this type of credit agreement;

4.3. if a credit agreement gives the consumer freedom of drawdown in general but imposes, amongst the different ways of drawdown, a limitation with regard to the amount and period of time, the amount of credit shall be deemed to be drawn down on the earliest date provided for in the agreement an in accordance with those drawdown limits;

4.4. if different borrowing rates and charges are offered for a limited period or amount, the borrowing rate and the charges shall be deemed to be the highest rate for the whole duration of the credit agreement.

4.5. for consumer credit agreements for which a fixed borrowing rate is agreed in relation to the initial period of the credit agreement at the end of which a new borrowing rate is determined and subsequently periodically adjusted according to an indicator on which the parties have agreed in the credit agreement, or for index rate (Libor, Euribor or other), the calculation of the annual percentage rate shall be based on the assumption that, at the end of the fixed borrowing rate period, the borrowing rate is the same as at the time of calculating the annual percentage rate of charge based on the value of the indicator at that time on which the parties have agreed in the credit agreement, or the index rate (Libor, Euribor or other), but is not less than the fixed borrowing rate;

4.6. if the parties have not yet agreed on the ceiling applicable to the credit, that ceiling is assumed to be 170,000 euros. For credit agreements the purpose of which is not to acquire or retain a right in immovable property, overdrafts, deferred debit cards or credit cards this ceiling is assumed to be 1,500 euros (this assumption shall not be applied to credit agreements which act as a guarantee to another separate but ancillary transaction, and where the capital secured against an immovable property is only drawn down if an event or events provided for in the contract occur);

4.7. in the case of credit agreements (other than overdraft facility agreements, credit agreements either of no fixed duration or which are due to be repaid within 12 months and which are used by the consumer as a temporary financing solution while transitioning to another financial arrangement for the immovable property (bridging loans), shared equity credit agreements where the capital repayable is based on a contractually set percentage of the value of the immovable property at the time of the capital repayment or repayments, credit agreements which act as a guarantee to another separate but ancillary transaction, and where the capital secured against an immovable property is only drawn down if an event or events provided for in the contract occur, and open-ended credit agreements as referred to in the assumptions provided for in Sub-paragraphs 4.9, 4.10, 4.11, 4.12, and 4.13 of this Annex) the following conditions shall be in effect for the calculation of the annual percentage rate of charge:

4.7.1. if the date or amount of a repayment of capital to be made by the consumer cannot be ascertained, it shall be assumed that the repayment is made at the earliest date provided for in the credit agreement and is for the lowest amount for which the credit agreement provides;

4.7.2. if the interval between the date of initial drawdown and the date of the first payment to be made by the consumer cannot be ascertained, it shall be assumed to be the shortest interval;

4.8. if the date or amount of a payment to be made by the consumer cannot be ascertained on the basis of the credit agreement or the assumptions referred to in Sub-paragraphs 4.7, 4.9, 4.10, 4.11, 4.12, and 4.13 of this Annex, it shall be assumed that the payment is to be made in accordance with the dates and conditions laid down by the creditor. When these are unknown, the annual percentage rate shall be calculated assuming that:

4.8.1. interest charges are paid together with the repayment of the capital;

4.8.2. non-interest charges expressed as a single sum are paid at the date of the conclusion of the credit agreement;

4.8.3. non-interest charges expressed as several payments are paid at regular intervals with equal time base separations, commencing with the date of the first repayment of capital, and if the amount of such payments is not known they shall be assumed to be equal amounts;

4.8.4. the final payment clears the balance of capital, interest and other charges, if any.

4.9. in the case of an overdraft facility, the total amount of credit shall be deemed to be drawn down in full and for the whole duration of the credit agreement. If the duration of the overdraft facility is not known, the annual percentage rate of charge shall be calculated on the assumption that the duration of the credit is three months;

4.10. in relation to credit agreements either of no fixed duration or which are due to be repaid within 12 months and which are used by the consumer as a temporary financing solution while transitioning to another financial arrangement for the immovable property (bridging loan), the total amount of credit shall be deemed to be drawn down in full and for the whole duration of the credit agreement. If the duration of the overdraft facility is not known, the annual percentage rate of charge shall be calculated on the assumption that the duration of the credit is 12 months;

4.11. in the case of an open ended credit agreement (other than an overdraft facility agreements and credit agreements either of no fixed duration or which are due to be repaid within 12 months and which are used by the consumer as a temporary financing solution while transitioning to another financial arrangement for the immovable property (bridging loans)) or agreements without fixed duration and according to which credits must be repaid in full within or after a period but, once repaid, become available to be drawn down again, the annual percentage rate of charge shall be calculated assuming that:

4.11.1. for credit agreements, the purpose of which is to acquire or retain rights in immovable property, the credit is provided for 20 years starting from the date of the initial drawdown, and that the final payment made by the consumer clears the balance of capital, interest and other charges (if any is provided in accordance with the credit agreement). If the purpose of the credit agreement is not to acquire or retain rights in immovable property or in the case of the credit agreement where the credit is drawn down by deferred debit cards or credit cards, this period of time shall be of one year;

4.11.2. the capital is repaid by the consumer in equal monthly payments, commencing 1 month after the date of the initial drawdown. However, in cases where the capital must be repaid only in full, in a single payment, within each payment period, successive drawdowns and repayments of the entire capital by the consumer shall be assumed to occur over the period of one year. Interest and other charges shall be applied in accordance with those drawdowns and repayments of capital and as provided for in the credit agreement;

4.12. in the case of credit agreements which act as a guarantee to another separate but ancillary transaction, and where the capital secured against an immovable property is only drawn down if an event or events provided for in the contract occur, it shall be deemed that the capital has been drawn down in full as a single amount not earlier than within one of the following periods of time:

4.12.1. the latest drawdown date permitted in accordance with the credit agreement being the potential source of the contingent liability or guarantee;

4.12.2. in the case of a rolling credit agreement - at the end of the initial period prior to the rollover of the agreement;

4.13. in the case of shared equity credit agreements where the total amount of the credit to be repaid is based on a contractually set percentage of the value of the immovable property at the time of the capital repayment or repayments:

4.13.1. the payments by consumers shall be deemed to occur at the latest date or dates permitted in accordance with the credit agreement;

4.13.2. percentage increases in value of the immovable property which secures the shared equity credit agreement, and the rate of any inflation index referred to in the agreement, shall be assumed to be a percentage equal to the higher of the current central bank target inflation rate or the level of inflation in the Member State where the immovable property is located at the time of conclusion of the credit agreement or 0 % if those percentages are negative.

Deputy Prime Minister,
Minister for Economics Arvils Ašeradens

 

Annex 2
Cabinet Regulation No. 691
25 October 2016

European Standardised Information for Credit Agreements for the Acquisition of Immovable Property or for Credit Agreements the Repayment of Which is Secured by an Immovable Property Mortgage

1. European Standardised Information Sheet

Notes.

1) * This information is optional for the creditor.

2) Wherever the words "where applicable" are indicated, the creditor shall fill in the section if such information is relevant to the credit agreement, or delete the information in question or the entire section if the information does not apply to the relevant type of credit. Where the entire section is deleted, the numbering of the form shall be adjusted accordingly.

3) Indications between square brackets provide explanations for the creditor and must be replaced with the corresponding information. Additional explanations regarding filling in the form are in Paragraph 2 of this Annex.

4) The information of the form shall be provided in a single document, using a font that is clearly readable. Bold font, shading or larger font sizes shall be used for the information elements to be highlighted. All applicable risk warnings shall be highlighted.

[Introductory text]

This document was produced for [given name, surname of consumer] on [current date] This document was produced on the basis of the information that you have provided so far and on the current financial market conditions The information below remains valid until [validity date], (where applicable) apart from the interest rate and other costs. After that date, it may change in line with market conditions (Where applicable) This document does not constitute an obligation for [name of creditor] to grant you a loan

1. Creditor

[Name, registration number] Phone number [Legal address and address of the actual provision of services (if different from the legal address)] [E-mail address]* [Fax number]* [Web address]* [Contact person/point]* (Where applicable information as to whether advisory services are being provided:) [(We recommend, having assessed your needs and circumstances, that you take out this mortgage./We are not recommending a particular mortgage for you. However, based on your answers to some questions, we are giving you information about this mortgage so that you can make your own choice.)]

2. (Where applicable) Credit intermediary

[Identity, registration number (for a natural person given name, surname)] [Phone number] [Legal address and address of the actual provision of services (if different from the legal address). For a natural person - the declared place of residence and actual address of the provision of services] [E-mail address]* [Fax number]* [Web address]* [Contact person/point]* (Where applicable, information as to whether advisory services are being provided) [(We recommend, having assessed your needs and circumstances, that you take out this mortgage./We are not recommending a particular mortgage for you. However, based on your answers to some questions, we are giving you information about this mortgage so that you can make your own choice.)] [Remuneration]

3. Main features of the loan

Amount and currency of the loan to be granted: [value][currency] (Where applicable) This loan is not in [national currency of the borrower] (Where applicable) The value of your loan in [national currency of the borrower] could change (Where applicable) For example, if the value of [national currency of the borrower] fell by 20 % relative to [credit currency], the value of your loan would increase to [insert amount in national currency of the borrower]. However, it could be more than this if the value of [national currency of the borrower] falls by more than 20 %. (Where applicable) The maximum value of your loan will be [insert amount in national currency of the borrower]. (Where applicable) You will receive a warning if the credit amount reaches [insert amount in national currency of the borrower]. (Where applicable) You will have the opportunity to [insert right to renegotiate foreign currency loan or right to convert loan into [relevant currency] and conditions] Duration of the loan: [duration] [Type of loan] [Type of applicable interest rate] Total amount to be reimbursed: This means that you will pay back [amount] for every [unit of the currency] borrowed (Where applicable) [This/Part of this] is an interest-only loan. You will still owe [insert amount of loan on an interest-only basis] at the end of the mortgage term (Where applicable) Value of the property assumed to prepare this information sheet: [insert amount] (Where applicable) Maximum available loan amount relative to the value of the property [insert ratio] or Minimum value of the property required to borrow the illustrated amount [insert amount] (Where applicable) [Security]

4. Interest rate and other costs

The annual percentage rate of charge (APRC) is the total cost of the loan expressed as an annual percentage. The APR is there to help you compare different offers The APRC applicable to your loan is [APRC] It comprises: Interest rate [value in percentage or, where applicable, indication of a reference rate (Libor, Euribor or other) and percentage value of creditor's spread] [Other components of the APRC] Costs to be paid on a one-off basis (Where applicable) You will need to pay a fee to register the mortgage. [Insert amount of fee where known or basis for calculation] Costs to be paid regularly (Where applicable) This APRC is calculated using assumptions regarding the interest rate (Where applicable) Because [part of] your loan is a variable interest rate loan, the actual APRC could be different from this APRC if the interest rate for your loan changes. For example, if the interest rate rose to [scenario as described in Part B], the APRC could increase to [insert illustrative APRC corresponding to the scenario] (Where applicable) Please note that this APRC is calculated on the basis that the interest rate remains at the level fixed for the initial period throughout the duration of the contract (Where applicable) The following costs are not known to the lender and are therefore not included in the APRC: [Costs] (Where applicable) You will need to pay a fee to register the mortgage Please make sure that you are aware of all other taxes and costs associated with your loan

5. Frequency and number of payments

Repayment frequency: [frequency] Number of payments: [number]

6. Amount of each instalment

[Amount] [currency] Your income may change. Please consider whether you will still be able to afford your [frequency] repayment instalments if your income falls (Where applicable) Because [this/part of this] is an interest-only loan you will need to make separate arrangements to repay the [insert amount of loan on an interest-only basis] you will owe at the end of the mortgage term. Remember to add any extra payments you will need to make to the instalment amount shown here (Where applicable) The interest rate on [part of] this loan can change. This means the amount of your instalments could increase or decrease. For example, if the interest rate rose to [scenario as described in Part B] your payments could increase to [insert instalment amount corresponding to the scenario] (Where applicable) The value of the amount you have to pay in [national currency of the borrower] each [frequency of instalment] could change. (Where applicable) Your payments could increase to [insert maximum amount in national currency of the borrower] each [insert period]. (Where applicable) For example, if the value of [national currency of the borrower] fell by 20 % relative to [credit currency] you would have to pay an extra [insert amount in national currency of the borrower] each [insert period]. Your payments could increase by more than this (Where applicable) The exchange rate used for converting your repayment in [credit currency] to [national currency of the borrower] will be the rate published by [name of institution publishing exchange rate] on [date] or will be calculated on [date] using [insert name of benchmark or method of calculation] (Where applicable) [Details on tied savings products, deferred-interest loans]

7. (Where applicable) Illustrative repayment table

This table shows the amount to be paid every [frequency] The instalments (column [relevant no.]) are the sum of interest to be paid (column [relevant no.]), where applicable, capital paid (column [relevant no.]) and, where applicable, other costs (column [relevant no.]). (Where applicable) The costs in the other costs column relate to [list of costs]. Outstanding capital (column [relevant no.]) is the amount of the loan that remains to be reimbursed after each instalment [Table]

8. Additional obligations

The borrower must comply with the following obligations in order to benefit from the lending conditions described in this document [Obligations] (Where applicable) Please note that the lending conditions described in this document (including the interest rate) may change if these obligations are not complied with (Where applicable) Please note the possible consequences of terminating at a later stage any of the ancillary services relating to the loan [Consequences]

9. Early repayment

You have the possibility to repay this loan early, either fully or partially (Where applicable) [Conditions] (Where applicable) Exit charge: [insert amount or, where not possible, the method of calculation] (Where applicable) Should you decide to repay this loan early, please contact us to ascertain the exact level of the exit charge at that moment

10. Flexible features

(Where applicable) [Information on portability/subrogation] You have the possibility to transfer this loan to another [lender][or] [property]. [Insert conditions] (Where applicable) You do not have the possibility to transfer this loan to another [lender] [or] [property] (Where applicable) Additional features: [insert explanation of additional features listed in Part B and, optionally, any other features offered by the lender as part of the credit agreement not referred to in previous sections]

11. Other rights of the borrower

(Where applicable) You have [length of reflection period] after [point in time when the reflection period begins] to reflect before committing yourself to taking out this loan. (Where applicable) Once you have received the credit agreement from the lender, you may not accept it before the end of [length of reflection period] (Where applicable) For a period of [length of withdrawal period] after [point in time when the withdrawal period begins] you may exercise your right to cancel the agreement. [Conditions] [Insert procedure] (Where applicable) You may lose your right to cancel the agreement if, during that period, you buy or sell a property connected to this credit agreement (Where applicable) Should you decide to exercise your right of withdrawal [from the credit agreement], please verify whether you will remain bound by your other obligations relating to the loan [including the ancillary services relating to the agreement] [, referred to in Section 8]

12. Complaints

If you have a complaint please contact [insert internal contact point and source of information on procedure] (Where applicable) Maximum time for handling the complaint [period of time] (Where applicable) [If we do not resolve the complaint to your satisfaction internally,] you can also contact: [insert name of external body for out-of-court complaints and redress] (Where applicable) or you can contact FIN-NET for details of the equivalent body in your own country

13. Non-compliance with the commitments linked to the loan: consequences for the borrower

[Types of non-compliance] [Financial and/or legal consequences] Should you encounter difficulties in making your [frequency] payments, please contact us straight away to explore possible solutions (Where applicable) As a last resort, your home may be repossessed if you do not keep up with payments

(Where applicable) 14. Additional information

(Where applicable) [Indication of the law applicable to the credit agreement]. (Where the lender intends to use a language different from the language of the ESIS) Information and contractual terms will be supplied in [language]. With your consent, we intend to communicate in [language/s] during the duration of the credit agreement [Insert statement on right to be provided with or offered, as applicable, a draft credit agreement]

15. Supervisor

This lender is supervised by [Name(s), and web address(es) of supervisory authority/ies]. (Where applicable) This credit intermediary is supervised by [Name and web address of supervisory authority]

2. Instructions to complete the European Standardised Information Sheet

2.1. In completing the European Standardised Information Sheet (ESIS), at least the following instructions shall be followed:

2.1.1. Section "Introductory text"

2.1.1.1. The validity date shall be properly highlighted. For the purpose of this section, the "validity date" means the length of time the information, e.g. the borrowing rate, contained in the ESIS will remain unchanged and will apply should the creditor decide to grant the credit within this period of time. Where the determination of the applicable borrowing rate and other costs depends on the results of the selling of underlying bonds, the eventual borrowing rate and other costs may be different from those stated. In those circumstances only, it shall be stipulated that the validity date does not apply to the borrowing rate and other costs by adding the words: "apart from the interest rate and other costs".

2.1.2. Section "1. Lender"

2.1.2.1. Name, telephone number, and geographical address of the creditor shall apply to the contact information that the consumer may use for future correspondence.

2.1.2.2. Information on the e-mail address, fax number, web address and contact person/point is optional.

2.1.2.3. In accordance with Article 3 of Directive 2002/65/EC, where the transaction is being offered at a distance, the creditor shall indicate, where applicable, the name and geographical address of its representative in the Member State of residence of the consumer. Indication of the telephone number, e-mail address and web address of the representative of the credit provider is optional.

2.1.2.4. Where Paragraph 2 of this Annex is not applicable, the creditor shall inform the consumer whether advisory services are being provided and on what basis using the wording included in Sub-paragraph 1 of the form included in Paragraph 1 of this Annex.

2.1.3. (Where applicable) Section "2. Credit intermediary"

2.1.3.1. Where the product information is being provided to the consumer by a credit intermediary, the abovementioned intermediary shall include the following information:

2.1.3.1.1. the name, telephone number and geographical address of the credit intermediary shall apply to the contact information that the consumer may use for future correspondence;

2.1.3.1.2. information on the e-mail address, fax number, web address and contact person/point is optional;

2.1.3.1.3. the credit intermediary shall inform the consumer whether advisory services are being provided and on what basis using the wording in Sub-paragraph 2 of the form included in Paragraph 1 of this Annex;

2.1.3.1.4. an explanation of how the credit intermediary is being remunerated. Where it is receiving commission from a creditor, the amount and, where different from the name in Sub-paragraph 1 of the form included in Paragraph 1 of this Annex, the name of the creditor shall be provided.

2.1.3. Section "3. Main features of the loan"

2.1.3.1. This section shall clearly explain the main characteristics of the credit, including the value and currency and the potential risks associated with the borrowing rate, including the ones referred to in Sub-paragraph 2.1.3.8, and amortisation structure.

2.1.3.2. Where the credit currency is different from the national currency of the consumer, the creditor shall indicate that the consumer will receive a regular warning at least when the exchange rate fluctuates by more than 20 %, where applicable, the right to convert the currency of the credit agreement or to the possibility to renegotiate the conditions and any other arrangements available to the consumer to limit their exposure to exchange rate risk. Where there is a provision in the credit agreement to limit the exchange rate risk, the creditor shall indicate the maximum amount the consumer could have to pay back. Where there is no provision in the credit agreement to limit the exchange rate risk to which the consumer is exposed to a fluctuation in the exchange rate of less than 20 %, the creditor shall indicate an illustration of the effect of a 20 % fall in the value of consumer's national currency relative to the credit currency on the value of the credit.

2.1.3.3. The duration of the credit shall be expressed in years or months, whichever is the most relevant. Where the duration of the credit can vary during the lifetime of the contract, the creditor shall explain when and under which conditions this can occur. Where the credit is open-ended, for example, for a secured credit card, the creditor shall clearly state that fact.

2.1.3.4. The type of credit shall be clearly indicated (e.g. mortgage credit, home loan, secured credit card). The description of the type of credit shall clearly indicate how the capital and the interest shall be repaid during the life of the credit (i.e. the amortisation structure), specifying clearly whether the credit agreement is on capital repayment or interest-only basis, or a mixture of the two.

2.1.3.5. Where all or part of the credit is an interest-only credit, a statement clearly indicating that fact shall be inserted prominently at the end of this section using the wording in Paragraph 1 of this Annex.

2.1.3.6. This section shall explain whether the borrowing rate is fixed or variable and, where applicable, the periods during which it will remain fixed; the frequency of subsequent revisions and the existence of limits to the borrowing rate variability, such as caps or floors. The formula used to revise the borrowing rate and its different components (e.g. reference rate, interest rate spread) shall be explained. The creditor shall indicate, e.g. by means of a web address, where further information on the indices or rates used in the formula can be found, e.g. Euribor or central bank reference rate.

2.1.3.7. If different borrowing rates apply in different circumstances, the information shall be provided on all applicable rates.

2.1.3.8. The "total amount to be repaid" corresponds to the total amount payable by the consumer. It shall be shown as the sum of the credit amount and the total cost of the credit to the consumer. Where the borrowing rate is not fixed for the duration of the contract, it shall be highlighted that this amount is illustrative and may vary, in particular in relation with the variation in the borrowing rate.

2.1.3.9. Where the credit will be secured by an immovable property mortgage or another comparable security, the creditor shall draw the consumer's attention to this. Where applicable, the creditor shall indicate the assumed value of the immovable property or other security used for the purpose of preparing this information sheet.

2.1.3.10. The creditor shall indicate, where applicable, one of the following amounts referred hereinafter:

2.1.3.10.1. maximum available loan amount relative to the value of the property, indicating the loan-to-value ratio. This ratio is to be accompanied by an example in absolute terms of the maximum amount that can be borrowed for a given property value; or

2.1.3.10.2. the minimum value of the property required by the creditor to lend the illustrated amount.

2.1.3.11. Where the credit is a multi-part credit (e.g. concurrently part fixed rate, part variable rate), this shall be reflected in the indication of the type of credit and the required information shall be provided for each part of the credit.

2.1.4. Section "4. Interest rate and other costs"

2.1.4.1. The reference to interest rate corresponds to the borrowing rate or rates.

2.1.4.2. The borrowing rate shall be stated as a percentage value. Where the borrowing rate is variable and based on a reference rate, the creditor may indicate the borrowing rate by stating a reference rate and a percentage value of the creditor's spread. The creditor shall however state the value of the reference rate valid on the day of issuing the ESIS. Where the borrowing rate is variable, the information shall include the assumptions used to calculate the APRC; where applicable - the applicable caps and floors, and a warning that the variability could affect the actual level of the APRC.

2.1.4.3. In order to attract the consumer's attention the font size used for the warning referred to in Sub-paragraph 2.1.4.2 of this Annex shall be bigger and shall figure prominently in the main body of the ESIS. The warning shall be accompanied by an illustrative example on the APRC. Where there is a cap on the borrowing rate, the example shall assume that the borrowing rate rises at the earliest possible opportunity to the highest level foreseen in the credit agreement. Where there is no cap, the example shall illustrate the APRC at the highest borrowing rate in at least the last 20 years, or, where the underlying data for the calculation of the borrowing rate is available for a period of less than 20 years, the longest period for which such data is available, based on the highest value of any external reference rate used in calculating the borrowing rate, where applicable, or the highest value of a benchmark rate specified by a competent authority or EBA where the creditor does not use an external reference rate. Such requirement shall not apply to credit agreements where the borrowing rate is fixed for a material initial period of several years and may then be fixed for a further period following negotiation between the creditor and the consumer. For credit agreements where the borrowing rate is fixed for a material initial period of several years and may then be fixed for a further period following negotiation between the creditor and the consumer, the information shall include a warning that the APRC is calculated on the basis of the borrowing rate for the initial period. The warning shall be accompanied by an additional, illustrative APRC calculated in accordance with Chapter II of this Regulation. Where the credit is a multi-part credit (e.g. concurrently part fixed rate, part variable rate), the information shall be provided for each part of the credit.

2.1.4.4. In the section on "other components of the APRC" all the other costs contained in the APRC shall be listed, including one-off costs such as administration fees, and regular costs (such as annual administration fees). The creditor shall list each of the costs by the categories (costs to be paid on a one-off basis, costs to be paid regularly and included in the instalments, costs to be paid regularly but not included in the instalments), indicating their amount, to whom they are to be paid and when. This shall not include costs incurred for breaches of contractual obligations. Where the amount is not known, the creditor shall provide an indication of the amount if possible or, if not possible, how the amount will be calculated and specify that the amount provided is indicative only. Where certain costs are not included in the APRC because they are unknown to the creditor, this shall be highlighted.

2.1.4.5. Where the consumer has informed the creditor of one or more components of his preferred credit, such as the duration of the credit agreement and the total amount of credit, the creditor shall, where possible, use those components; if the credit agreement provides for different ways of drawdown with different charges or borrowing rates and the creditor uses the assumptions set out in Paragraph 4 of Annex 1 to this Regulation, it shall indicate that other drawdown mechanisms for this type of credit agreement may result in a higher APRC. Where the conditions for drawdown are used for calculating the APRC, the creditor shall highlight the charges associated with other drawdown mechanisms that are not necessarily the ones used in calculating the APRC.

2.1.4.6. Where a fee is payable for registration of the mortgage or comparable security that shall be disclosed in this section with the amount, where known, or where this is not possible - the basis for determining the amount. Where the fees are known and included in the APRC the existence and amount of the fee shall be listed under "Costs to be paid on a one-off basis". Where the fees are not known to the creditor and, therefore, not included in the APRC, the existence of the fee shall be clearly mentioned in the list of costs which are not known to the creditor. In either case the standardised wording in Paragraph 1 of this Annex shall be used under the appropriate heading.

2.1.5. Section "5. Frequency and number of payments"

2.1.5.1. Where payments are to be made on a regular basis, the frequency of payments shall be indicated (e.g. monthly). Where the frequency of payments will be irregular, this shall be clearly explained to the consumer.

2.1.5.2. The number of payments indicated shall apply to the whole duration of the credit.

2.1.6. Section "6. Amount of each instalment"

2.1.6.1. The credit currency and currency of the instalments shall be clearly indicated.

2.1.6.2. Where the amount of the instalments may change during the life of the credit, the creditor shall specify the period during which that initial instalment amount will remain unchanged and when and how frequently afterwards it will change.

2.1.6.3. Where all or part of the credit is an interest-only credit, a statement clearly indicating that fact, shall be inserted prominently at the end of this section using the wording in Part A.

2.1.6.4. If there is a requirement for the consumer to take out a tied savings product as a condition for being granted an interest-only credit secured by a mortgage or another comparable security, the amount and frequency of any payments for this product shall be provided.

2.1.6.5. Where the borrowing rate is variable, the information shall include a statement indicating that fact, using the wording in Paragraph 1 of this Annex and an illustration of a maximum instalment amount. Where there is a cap, the illustration shall show the amount of the instalments if the borrowing rate rises to the level of the cap. Where there is no cap, the worst case scenario shall illustrate the level of instalments at the highest borrowing rate in the last 20 years, or where the underlying data for the calculation of the borrowing rate is available for a period of less than 20 years the longest period for which such data is available, based on the highest value of any external reference rate used in calculating the borrowing rate, where applicable, or the highest value of a benchmark rate specified by a competent authority or EBA where the creditor does not use an external reference rate. The requirement to provide an illustrative example shall not apply to credit agreements where the borrowing rate is fixed for a material initial period of several years and may then be fixed for a further period following negotiation between the creditor and the consumer. Where the credit is a multi-part credit (e.g. concurrently part fixed rate, part variable rate), the information shall be provided for each part of the credit and for the overall credit.

2.1.6.6. (Where applicable) Where the credit currency is different from the consumer's national currency or where the credit is indexed to a currency which is different from the consumer's national currency, the creditor shall include a numerical example clearly showing how changes to the relevant exchange rate may affect the amount of the instalments using the wording in Paragraph 1 of this Annex. The abovementioned example shall be based on a 20 % reduction in the value of the consumer's national currency together with a prominent statement that the instalments could increase by more than the amount assumed in that example. Where there is a cap which limits that increase to less than 20 %, the maximum value of the payments in the consumer's currency shall be stated instead and the statement on the possibility of further increases omitted.

2.1.6.7. Where the credit is fully or partly a variable rate credit and Sub-paragraphs 2.1.6.3 and 2.1.6.4 apply, the illustration referred to in Sub-paragraph 2.1.6.6 shall be given on the basis of the instalment amount referred to in Sub-paragraph 2.1.6.1.

2.1.6.8. Where the currency used for the payment of instalments is different from the credit currency or where the amount of each instalment expressed in the consumer's national currency depends on the corresponding amount in a different currency, this section shall indicate the date at which the applicable exchange rate is calculated and either the exchange rate or the basis on which it will be calculated and the frequency of their adjustment. Where applicable such indication shall include the name of institution responsible for publishing the exchange rate.

2.1.6.9. Where the credit is a deferred-interest credit under which interest due is not fully repaid by the instalments and is added to the total amount of the credit outstanding, there shall be an explanation of: how and when deferred interest is added to the credit as a cash amount, and what the implications are for the consumer in terms of their remaining debt.

2.1.7. Section "7. Illustrative repayment table"

2.1.7.1. This section shall be included where the credit is a deferred interest credit under which interest due is not fully repaid by the instalments and is added to the total amount of credit outstanding, or where the borrowing rate is fixed for the duration of the credit agreement.

Where the consumer has the right to receive a revised amortisation table, this shall be indicated.

2.1.7.2. Where the borrowing rate may vary during the lifetime of the credit, the creditor shall indicate the period during which that initial borrowing rate will remain unchanged.

2.1.7.3. The table to be included in this section shall contain the following columns: "repayment schedule" (e.g. month 1, month 2, month 3), "amount of the instalment", "interest to be paid per instalment", "other costs included in the instalment" (where applicable), "capital repaid per instalment" and "outstanding capital after each instalment".

2.1.7.4. For the first repayment year the information shall be given for each instalment and a subtotal shall be indicated for each of the columns at the end of that first year. For the following years, the detail can be provided on an annual basis. An overall total row shall be added at the end of the table and shall provide the total amounts for each column. The total cost of the credit to be paid by the consumer (i.e. the overall sum of the "amount of the instalment" column) shall be clearly highlighted and presented as such.

2.1.7.5. Where the borrowing rate is subject to revision and the amount of the instalment after each revision is unknown, the creditor may indicate in the amortisation table the same instalment amount for the whole credit duration. In such a case, the creditor shall draw that fact to the attention of the consumer by visually differentiating the amounts which are known from the hypothetical ones (e.g. using a different font, borders or shading). In addition, a clearly legible text shall explain for which periods the amounts represented in the table may vary and why.

2.1.8. Section "8. Additional obligations"

2.1.8.1. The creditor shall indicate in this section obligations such as the obligation to insure the immovable property, to purchase life insurance, to have a salary paid into an account with the creditor or to buy any other product or service. For each obligation, the creditor shall specify towards whom and by when the obligation needs to be fulfilled.

2.1.8.2. The creditor shall specify the duration of the obligation, for example until the end of the credit agreement. The creditor shall specify for each obligation any costs to be paid by the consumer which are not included in the APRC.

2.1.8.3. The creditor shall state whether it is compulsory for the consumer to purchase any ancillary services to obtain the credit on the stated terms, and if so, whether the consumer is obliged to purchase them from the creditor's preferred supplier or whether they may be purchased from a provider chosen by the consumer. Where such possibility is conditional on the ancillary services meeting certain minimum characteristics, such characteristics shall be described in this section.

Where the credit agreement is bundled with other products in a bundled offer, the creditor shall state the key features of those other products and clearly indicate whether the consumer has a right to terminate the credit agreement or the use of other products included in the bundled offer separately, the conditions for and implications of doing so, and, where applicable, the possible consequences of terminating the ancillary services required in connection with the credit agreement.

2.1.9. Section "9. Early repayment"

2.1.9.1. The creditor shall indicate under what conditions the consumer can repay the credit early, either fully or partially.

2.1.9.2. In the section on early repayment charges, the creditor shall draw the consumer's attention to any early repayment charge or other costs payable on early repayment in order to compensate the creditor and, where possible, indicate their amount. In cases where the amount of compensation would depend on different factors, such as the amount repaid or the prevailing interest rate at the moment of the early repayment, the creditor shall indicate how the compensation will be calculated and provide the maximum amount that the charge might be, or where this is not possible, an illustrative example in order to demonstrate to the consumer the level of compensation under different possible scenarios.

2.1.10. Section "10. Flexible features"

2.1.10.1. Where applicable, the creditor shall explain the possibility to and conditions for transferring the credit to another creditor or immovable property.

2.1.10.2. (Where applicable) Additional features: where the product contains any of the features listed in Sub-paragraph 2.1.10.5 of this Annex, this section must list these features and provide a brief explanation of: the circumstances in which the consumer can use the feature; any conditions attached to the feature; if the feature being part of the credit secured by a mortgage or comparable security means that the consumer loses any statutory or other protections usually associated with the feature; and the firm providing the feature (if not the creditor).

2.1.10.3. If the feature contains any additional credit, then this section must explain to the consumer: the total amount of credit (including the credit secured by the mortgage or comparable security); whether the additional credit is secured or not; the relevant borrowing rates; and whether it is regulated or not. Such additional credit amount shall either be included in the original creditworthiness assessment or, if it is not, this section shall make clear that the availability of the additional amount is dependent on a further assessment of the consumer's ability to repay.

2.1.10.4. If the feature involves a savings vehicle, the relevant interest rate must be explained.

2.1.10.5. The possible additional features are: "overpayment/underpayments" [paying more or less than that provided for in the amortisation structure in accordance with the standard procedures]; "payment holidays" [a period during which the consumer is not required to make payments]; "borrow back" [ability for the consumer to borrow again funds already drawn down and repaid]; "additional borrowing available without further approval"; "additional secured or unsecured borrowing" [in accordance with Paragraph 3 of this Annex above]; "credit card"; "linked current account"; and "linked savings account".

2.1.10.6. The creditor may include any other features offered by the creditor as part of the credit agreement and which are not mentioned in previous sections.

2.1.11. Section "11. Other rights of the borrower"

2.1.11.1. The creditor shall clarify the rights of e.g. withdrawal or reflection and, where applicable, other rights such as, portability (including subrogation) that exist, specify the conditions to which that right is subject, the procedures that the consumer will need to follow in order to exercise that right, inter alia, the address to which the notification of withdrawal shall be sent, and the corresponding fees (where applicable).

2.1.11.2. Where the consumer has the right to a reflection period or withdrawal, this shall be clearly stated.

2.1.11.3. In accordance with Article 3 of Directive 2002/65/EC, where the transaction is being offered at a distance, the consumer shall be informed of the existence or absence of a right of withdrawal.

2.1.12. Section "12. Complaints"

2.1.12.1. In this Section the internal contact point [name of the relevant department] and information on how to contact it to submit a complaint shall be indicated: [geographical address] or [telephone number] or [contact person], [contact details] and a link to the relevant page of a website or other similar information source where the information regarding the procedures for submitting complaints is available.

2.1.12.2. It shall contain the name of the relevant external body for submission of out-of-court complaints and ensuring of legal protection, and where using the internal complaint procedure is a precondition for access to the abovementioned body, it shall be indicated by using the wording referred to in Paragraph 1 of this Annex.

2.1.12.3. If the credit agreement is entered into with a consumer who is resident in another Member State, the creditor shall refer to the existence of FIN-NET (http://ec.europa.eu/internal_market/fin-net/).

2.1.13. Section "13. Non-compliance with the commitments linked to the loan: consequences for the borrower"

2.1.13.1. Where non-observance of any of the consumer's obligations linked to the credit may have financial or legal consequences for the consumer, the creditor shall describe in this section the different main cases (e.g. late payments/default, failure to respect the obligations set out in Paragraph 1, Section 8 "Additional obligations" of this Annex) and indicate where further information could be obtained.

2.1.13.2. For each of the cases, the creditor shall specify, in clear, easy comprehensible terms, the sanctions or consequences to which they may give rise. Any serious consequences shall be highlighted.

2.1.13.3. Where the immovable property used to secure the credit may be returned or transferred to the creditor, if the consumer does not comply with the obligations, this section shall include a statement indicating the abovementioned fact, using the wording in Paragraph 1 of this Annex.

2.1.14. Section "14. Additional information"

2.1.14.1. In the case of distance marketing, this section shall include any clause regarding the law applicable to the credit agreement or the competent court.

2.1.14.2. Where the creditor intends to communicate with the consumer during the life of the contract in a language different from the language of the ESIS, such fact shall be included and the language of communication shall be indicated. This is without prejudice to Article 3(1)(3)(g) of Directive 2002/65/EC.

2.1.14.3. The creditor or credit intermediary shall indicate to the consumer's right to receive or to be offered to receive, as applicable, a copy of the draft credit agreement at least once an offer binding on the creditor has been made.

2.1.15. Section "15. Supervisor"

2.1.15.1. The relevant authority or authorities responsible for the supervision of the pre-contractual stage of lending shall be indicated.

Deputy Prime Minister,
Minister for Economics Arvils Ašeradens

 

Annex 3
Cabinet Regulation No. 691
25 October 2016

Standard European Consumer Credit Information

1. Identity and contact details of the creditor and credit intermediary

Creditor Address of the building Telephone number* E-mail address* Fax number* Web address*	[Name, registration number] [Legal address and address of the actual provision of services (if different from the legal address)]
Credit intermediary (if applicable): Address of the building Telephone number* E-mail address* Fax number* Web address*	[Identity, registration number (for a natural person - given name, surname)] [Legal address and address of the actual provision of services (if different from the legal address) (for a natural person - the declared place of residence and address of the actual provision of services)]

Notes.
1. * This information is optional for the creditor.
2. Wherever "where applicable" is indicated, the creditor must fill in the row if the information applies to the credit service or delete the relevant information or the entire row if the information does not apply for the type of credit considered.
3. Indications between square brackets provide explanations for the creditor and must be replaced with the relevant information.

2. Description of the main features of the credit product:

The type of credit
The total amount of credit The ceiling or the total sums available under the credit agreement
The conditions governing the drawdown How and when you will obtain the money
The duration of the credit agreement
Instalments to be made by the consumer and, where appropriate, the order in which instalments will be allocated	You will have to pay the following: [the amount, number and frequency of payments to be made by the consumer]; Interest and/or charges will be payable in the following manner:
The total amount you will have to pay: The total amount of borrowed capital plus interest and possible costs applicable to your credit	[Sum of total amount of credit and total cost of credit]
The credit granted in the form of a deferred payment for a good or service or is linked to the supply of specific goods or the provision of a service (if applicable). Name of good/service Cash price
Sureties required (if applicable) This is a description of the security to be provided by you in relation to the credit agreement	[Kind of sureties]
Repayments do not give rise to immediate amortisation of the capital (if applicable)

3. Costs of the credit

The borrowing rate or different borrowing rates which apply to the credit agreement	[% Fixed or variable (with the index or reference rate applicable to the initial borrowing rate). Periods]
Annual percentage rate of charge of charge (APR) This is the total cost expressed as an annual percentage of the total amount of credit granted to you. The APR is there to help you compare different offers	[% A representative example mentioning all the assumptions used for calculating the annual percentage rate of charge to be set out here]
Is it compulsory, in order to obtain the credit or to obtain it on the terms and conditions marketed, to take out - an insurance policy securing the credit Or - another ancillary service If the costs of these services are not known by the creditor they are not included in the APR	Yes or no [if yes, specify the kind of insurance] Yes or no [if yes, specify the kind of ancillary service]
Related costs
Maintaining one or more accounts is required for recording both payment transactions and drawdowns (if applicable)
Amount of costs for using a specific means of payment (e.g. a credit card) (if applicable)
Any other costs deriving from the credit agreement (if applicable)
Conditions under which the abovementioned costs related to the credit agreement can be changed (if applicable)
Obligation to pay notarial fees (if applicable)
Costs in the case of late payments Missing payments could have severe consequences for you (e.g. forced sale of immovable property) and make obtaining credit more difficult in the future	You will be charged [indicate the interest rate in the case of late payments and the procedures for the application thereof, as well as any penalties or other compensation for the non-compliance or inadequate compliance with the contractual obligations, where applicable]

4. Other important legal aspects

Right of Withdrawal You have the right to withdraw from the credit agreement within 14 calendar days	Yes/no
Early repayment You have the right to repay credit early at any time in full or partially
The creditor is entitled to compensation in the case of early repayment (if applicable)	[Determination of the compensation (calculation method) in accordance with the procedures specified by Paragraph 83 of this Regulation]
Consultation of a database The creditor must inform you immediately and without charge of the result of a consultation of a database if a credit application is rejected on the basis of such a consultation. This provision shall not be applied if the provision of such information is prohibited by legal acts of the European Union or is in contrary to objectives of the public policy or public security
Right to a draft credit agreement You have the right upon request, to obtain a copy of the draft credit agreement free of charge. This provision does not apply if the creditor is at the time of the request unwilling to proceed to the conclusion of the credit agreement with you
The period of time during which the creditor is bound by the information provided prior to entering into contract (if applicable)	This information is valid from…until…

5. Additional information in the case of distance marketing of financial services (if applicable)

5.1. Information concerning the creditor
Representative of the creditor in your Member State of residence (if applicable) Address of the building Telephone number* E-mail address* Fax number* Web address* *This information is optional for the creditor	[Name [Legal address and address of the actual provision of services (if different from the legal address)]
Registration (if applicable)	[The register in which the creditor is entered and his registration number or an equivalent means of identification in that register]
The relevant supervisory authority (where applicable)
5.2. Information concerning the credit agreement
Exercising the right of withdrawal (where applicable)	[Practical instructions for exercising the right of withdrawal indicating, inter alia, the period for exercising the right, the address to which notification of exercise of the withdrawal should be sent and the consequences of non-exercise of that right]
The law taken by the creditor as a basis for the establishment of relations with you before the conclusion of the credit agreement (if applicable)
Clause stipulating the law applicable to the credit agreement and/or the competent court (if applicable)	[Relevant clause to be set out here]
Language regime (if applicable)	Information and contractual terms will be supplied in [specific language]. With your consent, we intend to communicate in [specific language/languages] during the duration of the credit agreement
5.3. Information concerning redress
Existence of and access to out-of-court complaint and redress mechanism	[Whether or not there is an out-of-court complaint and redress mechanism for the consumer who is party to the distance contract and, if so, the methods of access to it]

Deputy Prime Minister,
Minister for Economics Arvils Ašeradens

 

Annex 4
Cabinet Regulation No. 691
25 October 2016

European Consumer Credit Information Concerning an Overdraft Credit, Credit Granted by Member Benefit Organisations or Credit Agreements for the Honouring the Obligations of the Initial Credit Agreement

1. Identity and contact details of the creditor and credit intermediary

Creditor Address of the building Telephone number* E-mail address* Fax number* Web address*	[Identity, registration number] [Legal address and address of the actual provision of services (if different from the legal address)]
Credit intermediary (if applicable) Address of the building Telephone number* E-mail address* Fax number* Web address*	[Identity, registration number (for a natural person - given name, surname)] [Legal address and address of the actual provision of services (if different from the legal address) (for a natural person - the declared place of residence and address of the actual provision of services)]

Notes.
1. * This information is optional for the creditor.
2. Wherever "where applicable" is indicated, the creditor must fill in the row if the information applies to the credit service or delete the relevant information or the entire row if the information does not apply for the type of credit considered.
3. Indications between square brackets provide explanations for the creditor and must be replaced with the relevant information.

2. Description of the main features of the credit product:

The type of credit
The total amount of credit The ceiling or the total sums available under the credit agreement
The duration of the credit agreement
You may be requested to repay the amount of credit in full on demand at any time.

3. Costs of the credit

The borrowing rate or different borrowing rates which apply to the credit agreement	[% Fixed or variable (with the index or reference rate applicable to the initial borrowing rate)]
Annual percentage rate of charge (APR) where applicable) This is the total cost expressed as an annual percentage of the total amount of credit granted to you. The APR is there to help you compare different offers	[% A representative example mentioning all the assumptions used for calculating the annual percentage rate of charge to be set out here]
Costs (if applicable) The conditions under which these costs may be changed (if applicable)	[The costs applicable from the time the credit agreement is concluded]
Costs in the case of late payments	You will be charged [indicate the interest rate in the case of late payments and the procedures for the application thereof, as well as any penalties or other compensation for the non-compliance or inadequate compliance with the contractual obligations, where applicable]

4. Other important legal aspects

Termination of the credit agreement	[The conditions and procedure for terminating the credit agreement]
Consultation of a database The creditor must inform you immediately and without charge of the result of a consultation of a database if a credit application is rejected on the basis of such a consultation. This provision shall not be applied if the provision of such information is prohibited by legal acts of the European Union or is in contrary to objectives of the public policy or public security
The period of time during which the creditor is bound by the information provided prior to entering into contract (if applicable)	This information is valid from…until…

5. Additional information to be given where the information is provided prior to entering into a contract by a member benefit organisation or if consumer credit is offered to honour the obligations of the initial credit agreement

Instalments to be made by the consumer and, where appropriate, the order in which instalments will be allocated	You will have to pay the following: [Representative example of an instalment table, including the amount, number and frequency of payments to be made by the consumer]
The total amount you will have to pay
Early repayment You have the right to repay credit early at any time in full or partially The creditor is entitled to compensation in the case of early repayment (if applicable)	[Determination of the compensation (calculation method) in accordance with the procedures specified by Paragraph 83 of this Regulation]

6. Additional information to be given in the case of distance marketing of financial services (if applicable)

6.1. Information concerning the creditor
Representative of the creditor in your Member State of residence (if applicable) Address of the building Telephone number* E-mail address* Fax number* Web address* *This information is optional for the creditor	[Name] [Legal address and address of the actual provision of services (if different from the legal address)]
Registration (if applicable)	[The register in which the creditor is entered and his registration number or an equivalent means of identification in that register]
The relevant supervisory authority (where applicable)
6.2. Information concerning the credit agreement
Right of Withdrawal You have the right to withdraw from the credit agreement within 14 calendar days Exercising the right of withdrawal (where applicable)	yes/no [Practical instructions for exercising the right of withdrawal indicating, inter alia, the period for exercising the right, the address to which notification of exercise of the withdrawal should be sent and the consequences of non-exercise of that right]
The law taken by the creditor as a basis for the establishment of relations with you before the conclusion of the credit agreement
Clause stipulating the law applicable to the credit agreement and/or the competent court (if applicable)	Relevant clause to be set out here
Language regime (if applicable)	Information and contractual terms will be supplied in [specific language]. With your consent, we intend to communicate in [specific language/languages] during the operation of the credit agreement
6.3. Information concerning redress
Existence of and access to out-of-court complaint and redress mechanism	[Whether or not there is an out-of-court complaint and redress mechanism for the consumer who is party to the distance contract and, if so, the methods of access to it]

Deputy Prime Minister,
Minister for Economics Arvils Ašeradens

 

---

Translation © 2017 Valsts valodas centrs (State Language Centre)