Lisbon, December 10, 2025 — The Bank of Portugal is now authorized to oversee the sale of non-performing loans by banks to non-financial companies and can impose fines in case of regulatory non-compliance.
The Legal Regime for the Assignment and Management of Bank Credits, which implements a European directive into Portuguese legislation that should have been enacted nearly two years ago, comes into effect today. It regulates conditions for the assignment (sale) of credit portfolios (generally, non-performing loans) to non-financial entities.
The regime sets forth the rules banks must follow when selling credits and the companies purchasing them (often investment funds) and designates the Bank of Portugal as the authority responsible for supervising and overseeing the activities developed both by the companies buying the credits and by their managers.
Until now, the Bank of Portugal did not have supervisory and sanctioning powers over the sale of a credit to a company outside its supervisory perimeter.
It now has the authority to conduct inspections, receive and evaluate customer complaints, initiate administrative offense proceedings, and impose fines in cases of non-compliance.
The Bank of Portugal will also regularly receive data on credits sold to other companies. Until now, the total amounts sold by banks were not disclosed by the banking regulator and supervisor.
These credits will also be reported to the Central Credit Register (previously, a sold credit no longer appeared in this database).
In recent years, especially since 2017, banks have sold large credit portfolios (mainly mortgage loans) to improve their balance sheets.
Several customers complained that banks sold their loans without allowing them to exercise the so-called “right of redemption” of the contract (settle overdue debt, pay interest, and resume installment payments).
As a result, customers were unable to resume the credit because, from the moment of assignment (sale), the loan ceased to be covered by the legal regime regulating mortgage loans. Consequently, customers could no longer exercise the legally provided redemption, leaving them more unprotected and at risk of losing their homes.
In two similar rulings, one in October 2024 and the other in May 2025, the Supreme Court of Justice annulled the sale of two credit assignments, citing “fraud to the law” in operations conducted by Santander Totta and BPI, due to exclusion of customers from that legal protection.
In response to a Lusa inquiry about which credits the new rules apply to that take effect today, an official source clarified that they apply to credits sold from today onward (‘original assignments’).
Additionally, rules apply to credits that have already been sold and are sold again by the purchasing entities (‘subsequent assignments’) but only regarding the obligations to be observed by credit managers.
