Amendment To The Civil Code In Order To Foster Lending

On 13 June 2016 the Hungarian Parliament adopted an amendment to the Civil Code which entered into force two years ago. The main body of the amendment will enter into force on 1 October 2016, and reintroduces the independent mortgage (önálló zálogjog) which used to be part of the Hungarian secured transactions regime under the former civil code, and refines the rules of the security deposit (óvadék). The primary aim of the amendment, which entered into force on 1 July 2016 – according to government communication – was to correct the Civil Code's legislative and conceptual shortcomings and to simplify the operation of Hungarian financial institutions, as well as to ensure compliance with the Capital Requirements Regulation (CRR).