of July 12, 2008 No. ZR-122
About consumer crediting
Accepted by National Assembly of the Republic of Armenia on June 17, 2008
The purpose of this law – consumer protection, being the agreement party of consumer crediting or persons interested to use consumer loan, determination of single rules and development of credit granting system, increase in financial intermediation and increase in consumer confidence to financial system.
1. This law regulates the relations following from the agreement of crediting, feature of different types of credit agreements and compulsory provisions on their observance, conditions and procedure of payments of annual actual interest rate, responsibility of crediting, the right of consumers on the agreement of the credit and other relations connected with these agreements.
2. This Law extends also to the loans of agricultural purpose granted in the amount up to 5.000.000 dram (including 5.000.000 dram of the Republic of Armenia) and (or) their equivalent in foreign currency, and the loans granted to the midget commercial organizations and individual entrepreneurs in the amount up to 5.000.000 dram (including 5.000.000 dram of the Republic of Armenia) and (or) their equivalent in foreign currency, established by the Law of the Republic of Armenia "About the state assistance to small and medium business" if other is not provided by the Law.
1. In sense of this law and the legal acts adopted on its basis:
1) the Credit – the right of payment of the obligation by installments, the credit, loan, finance lease (leasing) or other agreement or the arrangement which purpose is financing of purchase of goods, services or works.
2) Crediting - bank, branch of foreign bank, credit institution, pawnshop or person who obtained license for activities on consumer crediting or person who obtained license for activities on consumer crediting which grants the loan.
3) the Agreement of crediting – the transaction according to which crediting grants or promises to grant to the consumer the loan.
4) the Supplier – physical person or legal entity: seller of goods or representative of services, or operator.
5) the Actual annual interest rate (Annual Percentage Rate or APR) – the total expenses of the consumer of crediting expressed by interest rate of granted loan and calculated on the basis of the formula given in article 13 of this law.
and. the physical person obtaining the credit for the purpose of the order or purchase of goods (works, services) provided for private, family, home or other use, not connected with business activity;
. the physical person obtaining the credit of agricultural purpose or the individual entrepreneur obtaining the credit of agricultural purpose;
century the loanee - the midget commercial organizations and individual entrepreneurs established by the Law "About the State Assistance to Small and Medium Business".
7) Total costs of crediting of the consumer – all percentage and other payments which the consumer shall pay (to make) for crediting.
8) The overdraft – the amount provided from bank with the consumer purpose in type of loan on bank deposit or other account, or the promise of provision of such amount, including on payment card.
9) the Agreement of crediting on credit card – the agreement of crediting according to which crediting, regardless of availability of bank deposit or other account, provides to the consumer on permanent basis renewable or not renewable credit line with in advance determined limit, for the purpose of financing by means of credit card of purchases and other payments of the consumer, and also the need for cash.
10) the Conciliator of financial system – person determined by the Law RA "About the Conciliator of financial system".
The requirements determined by this law do not extend on:
1) agreements of crediting for which payment (work) is not provided
percent or any other compensation;
3) on agreements on the room mortgage lending provided by the Law of the Republic of Armenia "About room mortgage lending", except as specified, provided by the Law of the Republic of Armenia "About room mortgage lending";
4) on leases, except as specified, when these agreements provide that the property right concerning object of lease will pass to the lessee.
1. The agreement of crediting shall be signed in writing.
2. The consumer shall receive one original of the credit agreement.
1) mark about the size of the actual annual interest;
2) mark concerning procedure, conditions and terms of change of the actual annual interest;
3) whenever possible, the reference concerning subjects to payment from the consumer, for the purpose of loan repayment, the sizes, frequency or terms of benefits amounts, percent and other obligatory payments, and also concerning the size of all (general) amount of these payments;
4) mark concerning the price of insurance, assessment and other additional services if receipt of these additional services is prerequisite for the conclusion of the agreement of crediting or receipt of the advertized actual annual interest rate and the acquirer of these services is crediting or crediting determines circle of those persons with whom the consumer has the right to sign contracts on provision of additional services.
5) marks concerning cases of application and procedure for application from crediting responsibility measures (penalties, or any other measures aggravating the consumer's condition) in case of failure to carry out or accomplishment not properly from the consumer of the obligations.
6) mark concerning the right of the consumer who is marked out in article 10 of this law.
7) mark about time allowed for considering.
8) mark concerning information, conditions, procedure and terms determined by this law, regulatory legal acts of the Central Bank of RA concerning different types of agreements of crediting.
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