The deadline for the public consultation of the Bank of Portugal’s (BdP) warning and instruction projects for banks to start evaluating on a monthly basis the signs of customer default ends this Thursday.
On September 8, the banking regulator and supervisor published a draft warning and an instructional draft on the prevention of default of private bank customers and the extrajudicial regularization of default hypotheses, with a view to revoking a 2012 notice and instruction, reinforcing the obligations of the constituent banks.
The changes that Banco de Portugal advocates are in line with the forecast in the (Government’s) decree-law that came into force on August 7, which aims to ensure that, on the eve of the end of credit defaults, banks are more diligent in signaling customers in trouble and present improvements in contractual conditions that facilitate the payment of debts.
According to government legislation, there is now additional protection for families within the scope of the Action Plan for the Risk of Default (PARI) and the Extrajudicial Procedure for Regularization of Default Situations (PERSI).
For BdP, given these changes, it is necessary to “review the regulatory framework”, even if the changes are not changed.
Banco de Portugal also intends to keep it on hold as both credit institutions (traditional banks) and companies, payment institutions and electronic money institutions receive reinforcement as their actions to try to avoid customer default.
The rules now also cover finance lease contracts, which were available from outside the scope.
It also provides that institutions must carry out, at least every month, the necessary steps to identify signs of deterioration in the financial capacity of customers.
The BdP defends that the changes must “take effect in a short period of time”.