What is changing at banks, credit cards and interest rates under the new bill to protect borrowers and the strict limits on borrowing costs?
In a period of increased financial pressure on Greek households and intensifying debate surrounding borrowing costs, the government is moving forward with an extensive legislative initiative that radically reshapes the framework <a href="https://tomanifesto.gr/protection of borrowers, introducing stricter transparency rules, maximum interest rate caps and enhanced rights for consumers vis-à-vis banks and credit institutions.
An important initiative through which the Ministry of Development seeks to strengthen the protection citizens against abusive and misleading practices is the new bill to safeguard consumer rights, promoted by Minister of Development Takis Theodorikakos and which has been opened for public online consultation through June 29.
The regulation
The new legislative measure, according to a Ministry press release, aims to create a fairer, safer, strict, and transparent framework by incorporating four European directives concerning consumer credit, distance contracts, the green transition, and the right to repair. Importantly, the Ministry of Development is adding additional protective measures beyond the requirements of the EU directives.
As part of this process, the ministry invites social partners, organizations, and all interested parties to participate in the public consultation by submitting proposals and comments aimed at improving the provisions of the draft bill.
Q&A
1. Which borrowers are covered by the Consumer Credit Directive
The regulations cover loan agreements without real property collateral (e.g., a mortgage), that is, loans not secured by a mortgage or other asset. These are primarily consumer loans, home improvement loans, and credit cards, for amounts up to 100,000 euros. This means it covers the majority of everyday household financing provided by banks.
2. An end to the “fine print”
One of the key problems the bill aims to address is the use of difficult-to-understand contract terms and hidden fees. From now on, contract terms must be clear and accessible to the average consumer, so that there are no pitfalls or misunderstandings leading to additional financial burdens.
3. Mandatory Transparency in Banking Contracts
The Ministry of Development places particular emphasis on the transparency of banking contracts. Banks will now be required to present, in a clear and understandable manner, all fees, interest rates, commissions, and the risks that a loan may entail. Providing consumers with complete information is a fundamental prerequisite for a healthy financial market.
4. Clarifying the borrower’s right to withdraw within 14 days
Every borrower already has the right to withdraw within 14 days of signing the contract, and the framework is now becoming clearer and more transparent. Any citizen may cancel the loan without penalties or the obligation
to provide a reason, provided they determine that the terms do not suit them or if they change their mind. This provision strengthens consumers’ bargaining position and brings Greek legislation into line with European consumer protection standards. The principle is that just as it is easy to enter into a contract, it must also be easy to withdraw from it.
5. Strengthening Human-Centered Service
With regard to the 2nd European Directive on distance contracts, at a time when banking services are becoming increasingly digital, the bill stipulates that citizens will have the right to speak with a live person when requesting human assistance. They will not be required to interact solely with automated systems or chatbots, which is particularly important for older adults and vulnerable social groups.
6. A dual safety net for consumers: Establishment of caps on the interest rate and the total cost of a loan
One of the most important provisions is the introduction of a cap on the total annual effective interest rate (APR), which may not exceed 30% to 50% of the APR, as published on a quarterly basis by the Bank of Greece. The exact percentage will be determined by a decision of the Minister of Development and the Minister of National Economy and Finance, in consultation with the Governor of the Bank of Greece. In addition, limits are set on the amount by which the principal balance of the loan may increase during repayment. Specifically, the final amount to be paid by the borrower—excluding credit cards—may not exceed 60% for loans with terms of up to 4 years, 70% for loans with terms of more than 4 years and up to 8 years, and 75% for loans with terms of more than 8 years.
7. Addressing Household Over-Indebtedness
This cap aims to put the brakes on situations where interest, fees, and charges led to a disproportionate increase in the final debt. For years, thousands of borrowers found themselves paying much more than they had originally anticipated. The new regulation aims to ensure predictability and control over the final cost.
8. Right to be forgotten for cancer survivors
Credit institutions are prohibited from using personal data related to a consumer’s cancer diagnosis for the purposes of an insurance contract linked to acredit agreement, provided that five years have elapsed since the completion of their treatment. This provision facilitates equal access for consumers to credit products and eliminates any potential discriminatory treatment.
9. Timeline for the Implementation of the Consumer Credit Directive
The directive on credit agreements will be fully implemented as of November 20.
10. Tightening of the framework for so-called “eco-friendly products”
Directive 2024/85 aims to further strengthen consumer protection. New, clear, and specific provisions and definitions are introduced, such as the concepts of “environmental claims,” “sustainability labels,” and the “durability” or “repairability” of goods, with the aim of combating misleading practices that create a false impression of environmental responsibility (greenwashing) and unduly influence consumer behavior and competition.
The directive prohibits misleading environmental claims and aims to improve information regarding key technical characteristics of products, such as durability, repairability, lifespan, and reusability. The long-term goal is to foster a consumer culture that supports the circular economy and helps reduce the environmental footprint. The effective date of this directive is September 27, 2026.
11. Strengthening the “right to repair”
Directive 2024/1799 aims to strengthen consumers’ right to repair their products rather than replace them prematurely, with the goal of reducing waste and overconsumption. The “right to repair” is being established. The seller is required to inform the consumer of their right to choose between repair and replacement, as well as of the extension of the limitation period.
The product categories, as defined by the directive, are as follows: household laundry appliances, household dishwashers, refrigerators, household clothes dryers, monitors and televisions, vacuum cleaners, servers and data storage products, cell phones, cordless phones, and computers—tablets, welding equipment.
12. It has no retroactive effect
It should be emphasized that it will have no retroactive effect, which means that it does not apply to loan agreements that have already been concluded.
