S.L. 376.10 Art. 32Conduct of business obligations when providing credit to consumers.

(1) The creditor and the credit intermediary shall act honestly, fairly, transparently and professionally and shall take into account the rights and interests of the consumers when carrying out any of the following activities:

(a) manufacturing credit products;

(b) advertising credit products in accordance with regulation 7;

(c) granting, intermediating or facilitating the granting of credit;

(d) providing advisory services;

(e) providing ancillary services to consumers; and

(f) executing a credit agreement:

Provided that the activities referred to in paragraphs (c) and (d), shall be based on information about the circumstances of the consumer and any specific requirement communicated by a consumer and on reasonable assumptions about risks to the consumer’s situation throughout the duration of the credit agreement:

Provided further that the activities referred to in paragraph (d), shall also be based on the information required under regulation 16(3)(a).

(2) The manner in which creditors remunerate their staff and credit intermediaries and the manner in which credit intermediaries remunerate their staff shall not impede their compliance with the obligation provided in sub-regulation (1).

(3) When establishing and applying remuneration policies for staff responsible for the assessment of creditworthiness, creditors shall comply with the following principles in a way and to the extent that is appropriate to their size, internal organisation and the nature, scope and complexity of their activities:

(a) the remuneration policy is consistent with and promotes sound and effective risk management and does not encourage risk-taking that exceeds the level of tolerated risk of the creditor; and

(b) the remuneration policy is in line with the business strategy, objectives, values and long-term interests of the creditor, and incorporates measures to avoid conflicts of interest, in particular by providing that remuneration is not contingent on the number or proportion of accepted applications for credit.

(4) Where creditors or credit intermediaries provide advisory services, the remuneration structure of the staff involved shall not prejudice their ability to act in the best interest of the consumer and is not contingent on sales targets.