Poland's new anti-usury laws put on hold by the European Commission

Polish lawmakers’ efforts to pass new fast-tracked anti-usury measures (the “Draft Law”) have been recently thwarted by the notification procedure set out in EU Directive 2015/1535. The Draft Law was initially scheduled to be enacted by the end of July, however it has now had to be put on hold. The standstill period will end on 28 September 2019. During this time, work on the Draft Law cannot continue (the European Commission did not consent to the urgent procedure, which allows for a continuation of the legislative work).

This notification procedure allows the European Commission to examine technical regulations which Member States intend to introduce for products and services, before they are adopted. The aim is to ensure that these texts are compatible with EU law and the Internal Market principles.

Current state of play

The Draft Law is now after its first reading in the Polish Parliament. In general, to become binding law the Draft Law requires three readings by the lower house (pl: Sejm) of the Polish Parliament and then the approval of the higher house (pl: Senat). It must then be signed by the President and, finally, published.

Below you can find some key takeaways from the Draft Law:

1. Tightening the limit of non-interest loan caps, New stricter limits would apply to consumer loans, consumer credits, and cash loans offered by banks. The new limits of non-interest loan caps vary, depending on the type of loan.
2. Introducing the Polish Financial Supervision Authority’s oversight over lending companies,
3. Strengthening the provisions regarding collateral, According to the proposed amendment, the establishment by a consumer of collateral in the form of a transfer of ownership of real estate might result in a loan agreement being invalid. This applies to cases where the real estate in question is to satisfy the consumer’s housing needs,
4. Introducing new types of usury offences into the Polish Penal Code, which will be punished with imprisonment of 3 months to 5 years.

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