With the new Legal Regime for the Assignment and Management of Bank Credits, which implements a 2021 European directive, customers whose credits in default are sold by the bank to a third party cannot end up in a worse situation than when the loan was managed by the bank before the transfer.
The new rules were supposed to be incorporated into national legislation by December 29, 2023, but delays by the previous and current government caused a breach of European law in 2024. Consequently, the European Commission initiated an infraction against the Portuguese state and, on February 12, 2025, filed a lawsuit at the Court of Justice of the European Union (CJEU) due to the absence of legislation.
On July 3, the government approved the decree implementing the directive, pending publication in the Official Gazette.
Until now, without the directive, mortgage loan customers were unable to resume the loan (rescinding the defaulted debt and interest, and returning to installment payments) because, once sold, the loan was no longer under the legal regulations governing real estate credit contracts.
This meant that bank customers excluded from this regime were deprived of legislation that allowed them to exercise the right to resume, thus finding themselves in a less protected situation.
The new rules introduce a change. The Bank of Portugal (BdP) stated that the new regime “ensures that borrowers’ rights are not affected by the credit assignment, enshrining the principle of assignment neutrality, according to which the borrower cannot end up in a worse legal situation than with the original lender.”
For mortgage loans, customers “cannot, after the assignment, be disadvantaged regarding the protection they have under existing legal and regulatory standards on mortgage credit,” emphasizes the central bank.
For the banking supervisor, the new model “is a very important step to reconcile the reduction of non-performing credit and the preservation of financial stability with the protection of bank customers’ rights.”
The BdP only supervises institutions that grant loans (such as commercial banks) and credit intermediaries, and does not have oversight powers over companies purchasing large credit portfolios from banks.
Companies of a different nature acquiring credits “are not subject to the Bank of Portugal’s supervision,” nor are they required “to comply with legal and regulatory rules specifically applicable to the marketing of mortgage credit,” reports the central bank. The same applies to companies subcontracted by these purchasers to manage the credits.
Currently, when a credit is assigned to an entity outside the BdP’s supervision perimeter, customers “stop benefiting from protections foreseen in applicable legislation,” and the central bank “is no longer competent to analyze any complaints,” notes the supervisor.
With the new regime taking effect, “entities acquiring bank credits will have to appoint a credit manager, authorized and registered with the Bank of Portugal, to ensure compliance with rules in dealing with clients, including in credit collection and renegotiation, as well as in providing information and handling complaints,” explains the central bank.
The credit manager must adhere to “standards in their relationship with the debtor, particularly duties of information and conduct,” and the Bank of Portugal can supervise these professionals and impose sanctions if they violate the rules.
