New revolving credit regulation

On 27 July, new regulationsAbre en ventana nueva were published introducing improvements aimed at increasing transparency with customers and strengthening the creditworthiness assessment that banks must carry out before granting revolving credit (through cards or by any other means) to prevent unsustainable debt situations in the future.

Below is a summary of the main changes to the existing legislation:

• Guidelines on customer creditworthiness assessment have been introduced for banks, which must ensure that customers will be able to pay their annual instalments (at least 25% of the amount of credit extended).

• Additional information requirements have been included, both prior to the signing of the contract and throughout its duration, to ensure that customers are aware at all times of their debt and of the options available for alleviating their debt burden.

• Measures have been reinforced for alerting customers of the commercial nature of promotional documents and leaflets, and criteria established to determine the representative example to be included in them.

The various parts of these regulations will enter into force on different dates from 2 January 2021 onwards.