Citadele Bank

On changes to rules concerning the calculation and deduction of loan and lending limit contractual fines

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Please be aware that as of January 1, 2015, all borrowers of loans will face amendments to the Latvian Civil Law that were approved by Parliament on June 20, 2014. The amendments set out different rules for calculating contractual fines and deducting funds irrespective of whether the lending agreement between the two parties does or does not speak to such regulations. This also applies to limits on payment cards.

Contractual fines will no longer be deducted from the next sum that is paid by the client, with the necessary sum being used first to pay interest, then the basic sum of the loan, and only then the contractual fine, doing so in accordance with contractual terms. Fines that are not paid in a timely way will be accumulated as debt.

The above mentioned requirements in the amended Civil Law, updated rules concerning the protection of consumer rights and the latest court rulings in this regard have been included in all lending agreements that have been concluded since January 2, 2014.

Beginning on January 1, 2015, the bank will be using an appropriate technical solution to deduct contractual fines in accordance with the law, irrespective of the rules of the lending agreement that has been concluded between the bank and the client.

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