Directive (EU) 2021/2167 on credit servicers and credit purchasers

What it is

The Committee on Economic and Monetary Affairs adopted the report by Esther DE LANGE (EPP, NL) and Irene TINAGLI (S&D, IT) on the proposal for a directive of the European Parliament and of the Council on credit servicers, credit purchasers and the recovery of collateral. The committee responsible recommended that the European Parliament’s position adopted at first reading under the ordinary legislative procedure should amend the Commission proposal as follows. The Directive should foster the development of secondary markets for non-performing loans (NPLs) in the EU by establishing safeguards and minimum requirements for the transfer of NPLs by credit institutions to non-credit institutions, while safeguarding borrowers’ rights. This Directive should therefore establish a Union-wide framework for both purchasers and servicers of non-performing credit agreements issued by credit institutions, whereby credit servicers should obtain authorisation and be subject to the supervision of Member States’ competent authorities. The European Parliament adopted a legislative resolution on the proposal for a directive of the European Parliament and of the Council on credit servicers, credit purchasers and the recovery of collateral. The European Parliament's position adopted at first reading under the ordinary legislative procedure amends the Commission's proposal as follows: The new directive harmonises the rules for credit servicers and credit purchasers with regard to non-performing loans issued by credit institutions. Its aim is to support the development of secondary markets for non-performing loans in the EU while ensuring that the sale of such loans does not undermine the rights of borrowers. The directive covers both the creditor's rights under a non-performing credit agreement and the non-performing credit agreement itself. A designated authority in the home Member State will be responsible for the authorisation and supervision of credit servicers, in close cooperation with the authorities of other Member States. The directive specifies that the applicant must be a legal person having its registered office or head office in the Member State where it applies for authorisation. Conditions for granting and maintaining authorisations should ensure that: - the members of the applicant’s management or administrative organ: (i) have a clean police record in relation to relevant criminal offences, in particular those relating to property, financial services and activities, money laundering, usury, fraud, tax crimes, violation of professional secrecy; (ii) have always been transparent , open and cooperative in their past business dealings with supervisory and regulatory authorities; - the applicant’s management or administrative organ, as a whole, has adequate knowledge and experience to conduct the business in a competent and responsible manner; - the persons who hold qualifying holdings are of sufficiently good repute; - the applicant has in place robust governance arrangements and adequate internal control mechanisms, including risk management and accounting procedures; - the applicant: (i) applies an appropriate policy ensuring compliance with rules…

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