Saeima Lifts Ban on Consumer Credit Advertising
The Latvian parliament has adopted amendments lifting the previous ban on advertising consumer credit to individuals, aligning national regulations with EU practices. Strict requirements for such ads remain, including a mandatory warning and content restrictions.
The Saeima has adopted amendments that lift the ban on advertising consumer credit to private individuals. Previously, only credit products for businesses could be advertised, while consumer credit ads, including credit cards, were prohibited for individuals. This restriction was stricter than in other European countries. The amendments aim to harmonize Latvian and European legislation to ensure equal competition for financial service providers.
As explained by Arvils Ašeradens (JV), chairman of the Economic Affairs Committee, the original ban was introduced to promote responsible borrowing. However, the economic environment and public financial literacy have changed, and mechanisms to protect borrowers have been introduced. Therefore, it is time to review the regulation to balance consumer protection and industry competitiveness.
Although the advertising ban is lifted, new credit ads must meet strict requirements. They must not encourage irresponsible borrowing, create the impression that credit is a solution to financial difficulties, or improve living standards. Also prohibited is emphasizing the speed and ease of obtaining a loan. Ads must include a warning "Warning! Borrowing costs money," occupying at least 10% of the ad space.
Other changes: credit agreements may only be concluded or amended between 8 a.m. and 9 p.m. Also, the Bank of Latvia will gain access to statistical data on food prices from store cashier scanners to better analyze price changes and consumer behavior. Currently, this access is available to the Central Statistical Bureau, the Ministry of Economics, and other supervisory authorities.
