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Hungary’s Financial Regulator Monitors Compliance with Consumer Protection Laws

Ensuring Fair Practices in Financial Services

Budapest, Hungary - The Hungarian National Bank (MNB) has taken steps to ensure that financial institutions and fintech companies operating in the country comply with consumer protection provisions of Hungarian law.

Monitoring and Enforcement

The MNB has the power to open proceedings for the protection of consumers’ interests if it finds any infringement. Within a six-month administrative time limit, the MNB can conduct direct inquiries or general inquiries, and carry out trial transactions.

If an infringement is found, the MNB may impose a range of sanctions, including:

  • Issuing warnings
  • Ordering cessation of the infringement
  • Prohibiting further infringement
  • Imposing consumer protection fines

Common Practices Under Review

The MNB has identified common practices that have attracted its attention, such as:

  • Unilateral increments in fees
  • Misinforming consumers about fintech services
  • Failure to provide information about services in Hungarian for domestic users

The regulator is also keeping a close eye on foreign-based fintech service providers operating in Hungary.

Looking Ahead to Future Changes

The MNB anticipates significant changes in legal and regulatory policy over the next few years, driven by:

  • Climate change
  • Sustainable finance
  • Green economy

Sustainable Finance

Sustainable finance refers to the process of taking environmental, social, and governance (ESG) criteria into account when making investment or financial decisions. The European Commission has announced a renewed sustainable finance strategy, and the European Banking Authority (EBA) has launched its Sustainable Finance Action Plan.

National banks are already moving towards greener and more sustainable financial solutions, and the MNB is ensuring that the domestic system of financial intermediation supports environmental sustainability through its financial products and services.

Digitalization and Fintech

Cybersecurity, digitalization, fintech, and other new technologies will likely drive changes in legal and regulatory policies over the next few years to provide a supportive, consumer-friendly, and stable environment for digital financial services.

Correction Date The information above is accurate as of February 12, 2021.