On 19 September this year, the Government submitted a Bill to the Riksdag (Bill 2024/25:17) containing proposals for stricter requirements for granting credit to consumers. The Bill can be regarded as the end product of what is referred to as the Over-Indebtedness Inquiry (SOU 2023:38), which was set up as early as 2021 and which submitted its report in 2023.
The Over-Indebtedness Inquiry initially put forward a number of proposals for legislative amendments to help reduce the risk of consumers being offered and granted loans that they lack the financial means to repay. The Inquiry also proposed the introduction of a national debt register and stricter requirements for payment systems for companies operating under the Swedish Act (2014:275) on certain operations with consumer credit..
The Bill that the Government has now presented contains several of the proposals put forward by the Over-Indebtedness Inquiry, though not the introduction of a national debt register or the proposal for requirements regarding the design of payment systems. The changes that the Government is now proposing include abolition of the high-cost loan credit type and the general application of the specific rules that currently only apply to this type of credit, such as interest rate caps, cost caps and restrictions on extending the term of the credit, to consumer credit. The rules are also being tightened, partly by introducing additional requirements on informing the consumer that a loan entails costs and partly by lowering the interest rate cap from its previous level of 40 percentage points above the reference rate to 20 percentage points above the reference rate. Furthermore, a restriction on processing fees is introduced whereby such fees may not exceed one per cent of the price base amount that applies when the loan agreement is entered into.
Because the rules that previously only applied to high-cost loans are becoming generally applicable, exemptions are also introduced for certain types of credit. There is a proposal that mortgages should be exempted from all requirements that previously only applied to high-cost loans. It is proposed that exemptions from the rules on absolute cost caps should also apply to overdraft facilities that mainly relate to credit purchases, such as credit cards, as well as to credit purchases with small credit amounts that do not exceed two per cent of the price base amount.
It is proposed that the new rules should enter into force on 1 March 2025, though they only need to be applied to loan agreements entered into after the date of entry into force.
The Bill is available to download from the Government website, here.
