Banks will have to change nearly 3 million loan agreement if Bulgarian lawmakers adopt backdated amendments to the Consumer Credit Act.

Independent MP Rumen Yonchev will propose an amendment binding banks to prepare new loan agreements within three months. Customers will be able to choose between the new and the old contract conditions, Darik news informs.

The amendments provide for a one-year gratis period within which new loans can be paid off without penalty interest. In this way, consumers can refinance their loan if they find better conditions. In addition to that, floating rates will be determined by the bank's fixed rate and a margin dependent on widely used indices.

According to bankers, the imposed amendment will result in additional costs. Prime Minister Plamen Oresharski has assured financiers that the changes to the Consumer Credit Act will not be approved, Darik news reports.

In end-March, Bulgarian lawmakers adopted on second reading amendments to the Consumer Credit Act under which creditors are prohibited from collecting more than a on-time fee and/or commission for the same service. The type, amount and service for which fees and/or commissions are collected must be clearly defined in the consumer credit contract.

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