Emerging markets lender could be capped by Polish lawmakers

The company said if enacted, the legislation could impact its financial performance.

In August 2013, the Ministry of Finance in Poland issued draft proposals containing amendments to Polish consumer finance law.

The draft proposals and subsequent updates were adopted by the Government in May 2015 and included a cap on all mandatory, non-interest costs charged for a consumer loan as part of the total cost of credit. In an update today, the company said: “As previously announced, IPF developed a product which addressed and complied with the draft legislation prepared by the Government.

“Following an intervention by a Member of Parliament of the ruling party late in the process, on July 10 the Lower Chamber of the Polish Parliament voted in favour of revisions to the draft law that would cap all non-interest costs, whether mandatory or not.

“If the legislation is enacted as currently drafted, IPF believes that all non-interest costs in connection with a consumer loan agreement may be subject to the cap.”

The company added: “IPF is reviewing the draft legislation to assess whether its product structure will be affected by the proposed cap.

“In addition, we are proactively developing an alternative product structure to mitigate any adverse financial impact to the greatest extent possible.

“Dependent on legal interpretation of the final version, however, there can be no assurance that the legislation, if introduced in its present form, would not have some adverse financial impact on IPF.”

The draft law will now go to the Upper Chamber of Parliament, where it can be accepted, amended or recommended for withdrawal.

If the Upper Chamber supports the draft legislation it will go to the President, who then has 21 days to sign the legislation into law, withdraw or send it to the Supreme Court.

According to the current draft of the legislation, it would become effective and lenders would be required to comply from six months after signature by the President.