What the amendment to the Consumer Credit Act changes

Where the Amendment Stands and Who It Affects

The amendment to the Consumer Credit Act has not yet been promulgated, but its content is already known following its approval by both chambers of parliament. It transposes the new European Consumer Credit Directive into Czech law, which member states are required to apply from November 20, 2026, meaning the Czech regulation will be delayed by a few months. It changes the rules for everyone who provides or intermediates credit, or sells goods on installments. Below we describe where the amendment currently stands, when it is expected to take effect, and which companies it affects.

Legislative Process and Transitional Provisions

The Chamber of Deputies approved the amendment on September 11, 2026, as parliamentary press 145. The Senate approved it on October 21 in the version passed by the Chamber of Deputies, so only the President's signature and promulgation in the Collection of Laws remain. According to the approved wording, the act is set to take effect on February 1, 2027. The President has 15 days from referral to return the act to the Chamber of Deputies. We will update this article as soon as the act is promulgated and its number is known.

Loans concluded before the amendment takes effect are governed by the current wording of the act. Therefore, the amendment does not retroactively change contracts already in your portfolio. The exception is open-end consumer credit, to which part of the new rules will apply retroactively. For interest-free loans, which currently stand outside most of the act, the transitional provisions explicitly state that the new wording will apply from February 1, 2027. Whether this will also affect interest-free loans concluded earlier is not entirely clear from the approved text, so we recommend preparing for the stricter alternative.

Companies that currently provide or intermediate interest-free loans without authorization from the CNB may continue their activities after the amendment takes effect. However, within 16 months, they must apply to the CNB for authorization or be registered as a tied agent or tied credit intermediary with an authorized company. Those who submit their application on time may continue until the CNB issues its decision. Those who do not apply must cease this activity after 16 months.

Provider, Intermediary, and Installment Seller

The amendment affects three groups of companies, bringing different changes to each. Non-bank credit providers face a price cap and stricter creditworthiness assessment rules. A merchant who sells goods on installments in cooperation with a bank or a finance company is usually a tied credit intermediary and is primarily responsible for information and advertising. The third group consists of deferred payment providers, who have so far stood outside the scope of the law.

For deferred payments, it matters who provides them and for how long. If the seller themselves defers the payment without interest and fees, they will remain outside most of the act, provided the customer pays within 50 days of delivery. A large e-shop that is not a small or medium-sized enterprise has a limit of only 14 days for distance selling and must not assign the claim. Current exemptions from the scope can be found in Section 5 of the Consumer Credit Act.

Deferred payments provided on behalf of the merchant by an independent installment or payment company are not covered by the exemption. Such a product will be a fully regulated credit. On the other hand, continuous supply of goods of the same kind or services paid for in installments remains outside the scope of the act. Leasing and renting without the right or obligation to purchase the item at the end also remain outside the act. However, leasing with a right or obligation of buyout can be a consumer credit, and for non-housing credit, the new price cap will then apply.

Credit Price Cap and the Risks of Exceeding It

The most visible change is the statutory price cap on consumer credit. For non-housing credit, the cost indicator at conclusion must not exceed four times the CNB repo rate increased by 8 percentage points. The repo rate is taken as of the first day of the half-year in which you conclude the credit, and is calculated at a minimum of 4%. As long as the repo rate is below this threshold, the cap comes out to 48% per annum, i.e., four times 12%.

For most loans, the cost indicator is the annual percentage rate of charge (APR). For tied credit for vehicle acquisition, the amendment uses a separate rate according to the annex to the act instead, which does not include payments for vehicle insurance, even if required by the contract. Car dealerships and leasing companies with buyouts should therefore recalculate the price of their products separately, not using a general calculator.

For small and short-term loans, a cap on total costs applies instead of a percentage. These are loans up to CZK 20,000 with a duration of no more than 12 months. Total costs must not exceed CZK 2,000 plus an amount derived from the loan amount, its duration, and the same rate as for large loans. The provider may apply the fixed component of CZK 2,000 to the same client only once every 12 months, unless the new credit is concluded at least a month after the previous ones have been repaid.

The consequence of exceeding the cap is adopted by the amendment from the rules for contracts lacking information on interest or APR. The interest rate is reduced to the CNB repo rate, and other agreed payments are disregarded, as currently stipulated in Section 110 of the Consumer Credit Act. The provider will thus lose both the fees and most of the credit yield. For a product sold on a large scale, the loss multiplies by the number of contracts.

The cap is assessed at the conclusion of the credit, not during its repayment. All costs that are included in the APR under the law go into the calculation, not just interest. Therefore, products with low interest and high fees are not safer. A price list that stands up today may become a cause for dispute after the amendment takes effect if the company does not recalculate it in time.

According to the Ministry of Finance, the cap is based on existing case law on disproportionately expensive loans, which we summarize in the article Extremely High Interest Rates and APR in Consumer Loans. The difference is that until now, the threshold was decided by a court in a specific dispute based on good morals. After the amendment takes effect, the threshold will be known in advance, and companies can account for it during product design.

Creditworthiness Assessment: What Remains and What Is New

The amendment does not change the main risk for providers: credit provided in breach of the obligation to assess creditworthiness is invalid. This is the case where the provider grants credit although a proper assessment does not show that there are no reasonable doubts about the client's ability to repay. The consumer then returns only the provided principal, within a period reasonable to their circumstances. The provider has no claim to interest and fees. The court will take invalidity into account even if the consumer does not raise it themselves, so it cannot be avoided by the client not filing a complaint.

This consequence is currently set out in Section 87 of the Consumer Credit Act, and the amendment leaves it in place. It changes the heading of the provision and adds a new paragraph with a presumption, which we write about below. For providers, this means that the quality of the creditworthiness assessment remains the main risk for the entire portfolio, not just individual contracts.

Courts examine whether the provider actually verified the client's data, not just whether they recorded it. According to the Supreme Court, professional diligence means verifying the data from the client and comparing it with publicly available data, such as the subsistence minimum or average household expenses. A mere declaration of income and expenses by the client is not enough. Internal calculations based on statistical estimates will only stand up if the provider compares them with the actual data of the client.

In resolution file no. 33 Cdo 1104/2026 of June 30, 2026, the Supreme Court upheld the conclusion that a mortgage loan of CZK 3.8 million was invalid. The provider verified the debtors' income, but derived their expenses from a single month's statement and internal tables. The debtors thus had to return only the remaining part of the principal.

The amendment adds a presumption that a consumer who has fully repaid the credit was creditworthy. For loans specifically intended for the acquisition, construction, or modification of real estate and for loans from a building society, it is sufficient if the client repaid the agreed installments for at least 18 months from the provision of the credit. This option does not apply to credit merely secured by real estate without such a purpose. The presumption is rebuttable, so the consumer can prove otherwise. For small short-term loans up to CZK 20,000, for which the act introduces a cap on total costs, the presumption does not apply after full repayment.

However, the presumption does not protect providers in the case of loans that the client is still repaying or has stopped repaying, which is where most disputes arise. Whether the assessment stands up depends on what documentation the provider relied on and how they verified the expenses of the specific client. Therefore, the Czech legal team at ARROWS law firm assesses the established process for each product individually, based on the loan amount, its duration, and the client group.

New rules are also being added for the assessment process itself. The provider must not use sensitive personal data, such as health data, or information from social networks. If the credit decision is made by an automated system, the client has the right to an explanation of the result by a staff member, to express their own opinion, and to a review of the decision. The provider must inform a rejected client without undue delay and, depending on the circumstances, refer them to debt counseling.

For interest-free deferred payments up to the average wage, the amendment simplifies the assessment. The provider only needs data from the single monthly reporting system, if available, information from the client's payment account, and data from a credit database. General assessment requirements, which continue to apply, can be found in Section 86 of the Consumer Credit Act.

Where Companies Will Lose Most on the Amendment

The first mistake is relying on the assumption that an interest-free product will remain outside the scope of the law. Zero-percent installments currently offered by a merchant through a partner finance company will be fully regulated credit from February 2027. Information obligations, creditworthiness assessments, and advertising rules will apply to them. Those who do not adapt their product risk invalid contracts and sanctions from the CNB.

The second mistake is keeping a price list that relies on fees. The cap is calculated from the total costs, so a product with low interest and a high setup fee can exceed it more easily than a product with higher interest. The consequence will affect all contracts concluded under such a price list. For a portfolio of thousands of small loans, this represents a loss that a subsequent adjustment of the price list cannot recover.

The third mistake is advertising built on quick money. Advertising for consumer credit must not suggest that the credit will improve the client's financial situation, and must not falsely claim that it replaces savings or increases the standard of living. It must not state that an existing debt or a record in a credit database has no effect on approval. It must now contain the warning "Warning! Borrowing money costs money" or another with the same meaning.

For merchants who only offer credit at the checkout or on an e-shop, the risk lies in the division of roles. The law also considers offering the opportunity to conclude credit or preparatory work for its conclusion as intermediation, which requires authorization or registration with the provider. We describe the boundary between lead generation and intermediation in the article Legal Framework and Risks of Lead Generation in the Consumer Credit Sector.

The fourth mistake is delaying preparation until the final months. Preparing an application for CNB authorization takes months and requires proving the professional competence of the people who deal with clients. Although the amendment allows 16 months to submit the application, contracts, forms, and price calculations must comply with the new wording from the very first day of effectiveness. Therefore, no transitional period applies to the modification of documents.

The fifth mistake is overlooking loans concluded for an indefinite period, typically revolving frameworks. For these, part of the new rules will apply also to contracts concluded before the amendment takes effect. A company that has such products in its portfolio must also adjust communication with existing clients, not just new contracts and forms for new customers.

How to Prepare for the Amendment by February 2027

Preparation begins with an inventory of all products where the client pays later or in installments. This includes classic loans, installment sales, deferred payments on e-shops, leasing with buyouts, and installment plan agreements. For each product, determine who the provider is, what your role is, and whether the product will fall under the act after the amendment.

The second step is to recalculate the price. For each product, calculate the cost indicator and compare it with the cap, and for small loans, also the total costs. The result will show whether to modify the product or withdraw it from the offer. Products differ in duration, amount, and client group, and the result cannot be transferred from one to another, which is why the lawyers from the Prague-based law firm ARROWS go through them with the client product by product.

The third step is a revision of the creditworthiness assessment process. Verify what sources you draw expense data from, how you verify them, and whether the process uses prohibited data. If you automate decision-making, prepare a procedure for explaining the result and for review by a staff member. Also, add information for rejected clients, including a link to debt counseling.

The fourth step is documentation. Modify pre-contractual information, contracts, advertising materials, and website texts. The amendment adds, for example, the obligation to warn the client that the offer is individually tailored based on automated data processing. During the revision, it is also worth reviewing obligations related to credit outside this act, such as AML obligations of credit providers.

The fifth step is to decide on authorization and contracts with partners. A company that has so far provided interest-free loans without supervision must choose between its own authorization from the CNB and cooperation with an authorized provider. Merchants should verify that their installment partner will register them with the CNB, and divide responsibility for information, advertising, and client complaints in the contract with them.

The sixth step, which mainly concerns providers, is the procedure in case of client default. Before a creditor initiates proceedings regarding their claims, they must, in appropriate cases, offer the client a reasonable measure, such as extending the loan term, deferring installments, reducing the interest rate, or forgiving part of the debt. A provider who fails to do so will now commit an offense, so it is advisable to incorporate this step into the recovery process before the amendment takes effect.

Risks of the Amendment for Providers and Installment Sellers

Final Summary

The amendment to the Consumer Credit Act introduces a price cap, extends the act to most interest-free installments, and refines creditworthiness assessments. The sanction that providers fear most, i.e., invalidity of the contract and return of principal only, remains. It is newly mitigated by a rebuttable presumption of creditworthiness for fully repaid loans and for housing loans and building society loans repaid for at least 18 months.

For company management, time is crucial. The Senate has approved the amendment, leaving roughly three months until it takes effect, and the price cap will apply to every credit concluded from the very first day. Delaying preparation means risking that the company will sell a product from which it will only keep the principal or interest at the repo rate level.

Lawyers from the Prague-based law firm ARROWS help both providers and merchants navigate the entire preparation process. We will assess your products and their price against the cap, modify contracts, pre-contractual information, and advertising, and set up the creditworthiness assessment process. We will also prepare the application for CNB authorization or a contract with an installment partner.

Write to us at consultation@arws.cz to arrange an initial meeting regarding your products. For the meeting, prepare a list of products and your current price list so we can immediately estimate where the risk is greatest. An overview of our services for regulated financial companies can be found on the page CNB Licenses and Investments.