On 1 December 2016 the newly adopted Act on Consumer Credit No 257/2016 Coll. is coming into effect. The CNB published information (in Czech) on the submission of applications to perform activities according to the law and the decrees (in Czech) – the Decree No 381/2016 Coll. on applications, measures and submission of reports according to the Act on Consumer Credit and the Decree No 384/2016 Coll. on the technical qualification for consumer credit distribution.
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The Czech Ministry of Finance launched on 19 June 2015 an intra-governmental consultation on the draft law on credit for consumers. The consultation was completed on 20 July 2015. This means that the draft law is at an early stage of the legislative process. The process may be monitored on: https://apps.odok.cz/kpl-detail?pid=KORN9XMAYSLG
According to the submission report on the draft law, the draft law comprehensively regulates the distribution of retail credits. This is a new law; however, it takes over the existing law No. 145/2010 Coll., on consumer credits, and newly, it incorporates the product regulation on mortgages and single institutional regulation common for the whole credit market. The institutional regulation contains detailed requirements on the housing credit intermediaries and on non-bank providers of housing credits.
Generally, the draft law aims to strengthen consumer protection and enhance the credibility of the industry and to implement the Directive 2014/17/EU on credit agreements for consumers relating to residential immovable property (the so-called Mortgage Credit Directive, MCD) – see: http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32014L0017 This Directive aims to create a Union-wide mortgage credit market with a high level of consumer protection.
The Directive covers all loans made to consumers for the purpose of buying a home as well as all loans to consumers that are guaranteed by a mortgage or another comparable security. Member States have to transpose MCD into their national law by March 2016.
Thus, the draft law should also unify the conditions for credits for consumers (both consumer credits and mortgage credits) and consolidate the legal conditions for the distribution of credits on the financial market.
According to some sources, there are, however, diverging views on the proposal of integrated supervision of both bank and non-bank credit providers in the central bank. Allegedly, the reason is that credits provided by non-bank institutions do not relate to financial stability. See e.g. (in Czech): http://www.ceska-justice.cz/2015/03/cnb-odmitla-pelikanuv-plan-aby-dohlizela-na-nebankovni-domy-poskytujici-pujcky/