On 01 April 2014 the National Council of the Slovak Republic approved a bill, which amends the Civil Code, as well as other acts, including the Execution Code (hereinafter ”Amendment”).

As one of the most significant changes, the Amendment has embedded a definition of civil law usury directly into the Civil Code (until now it was only a term of the criminal law), as a result of which, any legal action taken by a natural person - non-entrepreneur - where someone abuses his/her distress, inexperience, mental forwardness, unrest, credulity, carelessness, financial dependency or inability to perform, whereby the performance is grossly disproportionate to the service rendered, will be sanctioned by an absolute invalidity. In addition, the maximum limit of reward for the provision of financial resources has been set up (i.e. including interest, fees etc.) as twice the average interest rate required by banks for a similar bank credit or loans per year. The Amendment has also extended the regulation of unacceptable contractual conditions regulated by the Civil Code. Also, consumer contracts and related general terms and conditions shall be executed using Times new roman font of at least 12 “points”.

The Amendment limits executors in case of executions of pecuniary claims not exceeding EUR 2,000.00 (small execution); in this respect it will not be possible to carry out the execution by sale of real estate, in which the obligor has a reported permanent/temporary residence (the Amendment also provides for possible exceptions). In case of small executions there are also limitations of reimbursement of creditor’s execution costs.

The Consumer Loans Act will bind creditors to inform debtors about delay in payments of consumer loans within the due date, either in writing or in the form of short text messages (SMS), within 15 days from the due date. The Amendment also introduces higher requirements on statutory representatives of companies providing consumer loans and the possibility of erasure of the creditor from the creditors register on the basis of the decision of the Slovak Trade Inspection, in case of repeated misdemeanors.

The Amendment shall become effective on 01 June 2014, respectively some of its provisions on 01 September 2014.

Additional note of the author:
Effective as of 01 June 2014, the Slovak Government Regulation has adjusted the remuneration for providing funds to consumers; it consists of interest, fees and any other retributive fulfilments or other costs which are agreed upon signing a consumer contract and associated with providing funds or required for the provision of funds. The remuneration is expressed as a percentage of the amount of contractually agreed funds per year; it is calculated as a total of individual fulfillments for year. Simultaneously, there was a modification of the maximum limit of the remuneration for the provision of funds to a customer; it may not exceed double interest rates for households; this will apply only to funds provided to the consumer after 31 June 2014 and before 01 September 2014.