PORTUGAL Law and Practice Contributed by: João G Gil Figueira, Rodrigue Devillet Lima and Catarina Andrade Miranda, GFDL Advogados
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities
4.2 Underwriting Processes Lending institutions manage the underwriting process until a loan agreement is concluded. This process entails assessing the borrower’s creditworthiness, conducting credit rating checks, and utilising internal risk classification procedures and external credit assessments. The type of collateral provided also has a bear - ing on the approval process. Each Portuguese bank usually has its own set of underwriting cri - teria. Additionally, all lenders are subject to AML obligations under Law No 83/2017 of 18 August. The regulatory landscape governing credit checks on consumers, particularly for consumer real estate loans, is multifaceted. The Consumer Credit Directive (2008/48/EC), incorporated into Portuguese law, is the cornerstone for oversee - ing all consumer loan agreements. However, the evolving nature of financial transactions necessi - tates ongoing updates to regulatory frameworks. Moreover, real estate-backed loans are subject to additional stringent regulations under the Mortgage Credit Directive (2014/17/EU), which is also transposed into Portuguese law. These reg - ulations encompass various aspects, including advertising, contractual information dissemina - tion and rigorous credit checks. The overarching goal is safeguarding consumers’ interests and ensuring responsible lending practices within the real estate sector. 4.3 Sources of Funds for Fiat Currency Loans The traditional Portuguese lending market relies on deposit-based solutions involving a banking licence. From a commercial perspective, legacy players such as banks and credit institutions are in a position to draw funding from deposits. They are usually backed by solid human and tech - nological resources, allowing those players to
Lending is an activity reserved for authorised credit and financial institutions, regardless of the type of borrower. In general, authorisation by the Bank of Portugal is required to grant loans as it is deemed a banking activity. Some forms of peer- to-peer lending would fall within the concept of crowdfunding and be regulated by the CMVM. Depending on the type of loan, such as a con - sumer or asset-backed loan, rules vary in rela - tion to certain criteria such as effort rates, inter - est rates and maturity date. Consumer loans are regulated by Decree-Law No 133/2009 of 2 June in line with Directive 2008/48/EC of the European Parliament and the Council of 23 April 2008. The Law on Distance Contracting of Financial Services would also apply. In most cases, a consumer can cancel a loan agreement within 14 days. For mortgage-backed loans, the general provi - sions are provided by Decree-Law No 74-A/2017 of 23 June, which transposes Directive 2014/17/ EU of the European Parliament and of the Coun - cil of 4 February 2014 on credit agreements for consumers relating to residential immovable property. Under the above-mentioned provi - sions, lenders must refrain from unfair and mis- leading advertising practices and must present adequate information on the conditions of the loans being offered to the consumer. Micro- and short-term loans are also allowed for payment, and e-money institutions are allowed, provided that the creditors meet some criteria and conditions.
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