EUROPEAN UNIONTHE EUROPEAN PARLIAMENT

THE COUNCIL
Brussels, 27 October 2021
(OR. en)

2018/0063 A (COD)

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EF 209ECOFIN 621
JAI 758
JUSTCIV 98
EJUSTICE 66
COMPET 501
EMPL 301
SOC 407
DRS 37CODEC 937
LEGISLATIVE ACTS AND OTHER INSTRUMENTS
Subject:

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on credit servicers and credit purchasers and amending
Directives 2008/48/EC and 2014/17/EU

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DIRECTIVE (EU) 2021/…
OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
of …
on credit servicers and credit purchasers
and amending Directives 2008/48/EC and 2014/17/EU(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Article 53
and Article 114 thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national parliaments,
Having regard to the opinion of the European Central Bank1,
Having regard to the opinion of the European Economic and Social Committee2,
Acting in accordance with the ordinary legislative procedure3,

1
2
3

OJ C 444, 10.12.2018, p. 15.
OJ C 367, 10.10.2018, p. 43.
Position of the European Parliament of 19 October 2021 (not yet published in the Official
Journal) and decision of the Council of ....

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Whereas:(1)

The establishment of a comprehensive strategy to address the issue of non-performing
loans (NPLs) is a priority for the Union. While addressing NPLs is primarily the
responsibility of credit institutions and Member States, there is also a clear Union
dimension to the reduction of current stocks of NPLs, as well as to the prevention of any
excessive build-up of NPLs in the future. Given the interconnectedness of the banking andfinancial systems across the Union, where credit institutions operate in multiple
jurisdictions and Member States, there is significant potential for spill-over effects between
Member States and the Union at large, both in terms of economic growth andfinancial stability.

(2)

An integrated financial system will enhance the resilience of the economic and monetary
union to adverse shocks by facilitating private cross-border risk-sharing, while at the sametime reducing the need for public risk-sharing. In order to achieve those objectives, theUnion should complete the banking union and further develop a capital markets union(CMU). Addressing high stocks of NPLs and their possible future accumulation is essential
to strengthening the banking union as it is indispensable for ensuring competition in thebanking sector, preserving financial stability and encouraging lending so as to create jobs
and growth within the Union.

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(3)

The Council conclusions of 11 July 2017 on Action Plan to Tackle Non-Performing Loansin Europe (the ‘Action Plan’) called upon various institutions to take appropriate measures
to further address the high number of NPLs in the Union and prevent their possible futureaccumulation. The Action Plan sets out a comprehensive approach that focuses on a mix ofcomplementary policy actions in four areas: (i) bank supervision and regulation, (ii) reformof restructuring, insolvency and debt recovery frameworks, (iii) developing secondary
markets for distressed assets, and (iv) fostering restructuring of the banking system. Actionin those areas is to be taken at national level and at Union level where appropriate. The
Commission announced a similar intention in its communication of 11 October 2017 oncompleting the banking union, which called for a comprehensive package on tackling
NPLs within the Union.

(4)

This Directive, together with other measures which the Commission has put forward, as
well as the action taken by the European Central Bank (ECB) in the context of banking
supervision under the Single Supervisory Mechanism and by the European Supervisory
Authority (European Banking Authority) (EBA), established by Regulation (EU)No 1093/2010 of the European Parliament and of the Council1, will create the appropriate
environment for credit institutions to deal with NPLs on their balance sheets, and will
reduce the risk of future NPL accumulation.

1

Regulation (EU) No 1093/2010 of the European Parliament and of the Council of
24 November 2010 establishing a European Supervisory Authority (European Banking
Authority), amending Decision No 716/2009/EC and repealing Commission Decision
2009/78/EC (OJ L 331, 15.12.2010, p. 12).

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(5)

When developing macro-prudential approaches to prevent the emergence of system-widerisks associated with NPLs, the European Systemic Risk Board, established by Regulation(EU) No 1092/2010 of the European Parliament and of the Council1, is required to issue,
where appropriate, macro-prudential warnings and recommendations relating to thesecondary market for NPLs.

(6)

Regulation (EU) 2019/630 of the European Parliament and of the Council2 introduced newrules in Regulation (EU) No 575/2013 of the European Parliament and of the Council3 that
require credit institutions to put aside sufficient resources when new loans become
non-performing, which should create appropriate incentives to address NPLs at an earlystage and should prevent an excessive accumulation of them. Where loans become
non-performing, more efficient enforcement mechanisms for secured loans would allow
credit institutions to implement a holistic strategy to enforce NPLs, subject to strong andeffective safeguards for borrowers. Nevertheless, should NPL stocks become too high,credit institutions should be able to sell them in efficient, competitive and transparent
secondary markets to other operators. Competent authorities of credit institutions guidethem in doing so, based on their existing bank-specific, so-called Pillar 2, powers under
Regulation (EU) No 575/2013. Where NPLs become a significant and broad-based
problem, Member States are able to set up national asset management companies or otheralternative measures within the framework of current state aid and bank resolution rules.

1

2

3

Regulation (EU) No 1092/2010 of the European Parliament and of the Council of
24 November 2010 on European Union macro-prudential oversight of the financial systemand establishing a European Systemic Risk Board (OJ L 331, 15.12.2010, p. 1).
Regulation (EU) 2019/630 of the European Parliament and of the Council of 17 April 2019
amending Regulation (EU) No 575/2013 as regards minimum loss coverage fornon-performing exposures (OJ L 111, 25.4.2019, p. 4).
Regulation (EU) No 575/2013 of the European Parliament and of the Council of
26 June 2013 on prudential requirements for credit institutions and amending Regulation(EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).

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(7)

This Directive should enable credit institutions to better deal with loans that become
non-performing by improving conditions for the sale of the credit to third parties.
Moreover, when credit institutions face a large build-up of NPLs and lack the staff orexpertise to properly service them, they should be able to either outsource the servicing of
those loans to a specialised credit servicer or to transfer the credit agreement to a credit
purchaser that has the necessary risk appetite and expertise to manage it.

(8)

While the terms ‘loans’ and ‘banks’ are commonly referred to in the public debate, themore precise legal terms of ‘credit’ or ‘credit agreements’ and ‘credit institution’ are usedhereafter. Moreover, this Directive covers both a creditor’s rights under a non-performing
credit agreement and the non-performing credit agreement itself.

(9)This Directive should foster the development of secondary markets for NPLs in the Union
by removing impediments to, and laying down safeguards for, the transfer of NPLs by
credit institutions to credit purchasers, while at the same time safeguarding borrowers’
rights. Any measures adopted should harmonise the authorisation requirements for credit
servicers. This Directive should therefore establish a Union-wide framework for bothpurchasers and servicers of non-performing credit agreements issued by credit institutions,whereby credit servicers should obtain authorisation from, and be subject to thesupervision of, Member States’ competent authorities.

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(10)

Currently, credit purchasers and credit servicers cannot reap the benefits of the internalmarket due to barriers erected by divergent national regimes in the absence of a dedicatedand coherent regulatory and supervisory regime. At present, there are no common Union
standards for the regulation of credit servicers. In particular, no common standards havebeen set for the regulation of debt collection. Member States have very different rules for
how credit purchasers are able to acquire credit agreements from credit institutions. Credit
purchasers that purchase credit issued by credit institutions are not regulated in someMember States, while in others they are subject to various requirements, sometimes
amounting to a requirement to obtain an authorisation as a credit institution. Thosedifferences between regulatory requirements have resulted in considerable obstacles tolegally purchasing credit cross-border in the Union mainly by increasing the compliancecosts faced when seeking to purchase credit portfolios. As a result, credit purchasers
operate in a limited number of Member States, which has resulted in weak competition in
the internal market, as the number of interested credit purchasers remains low. That in turnhas led to an inefficient secondary market for NPLs. In addition, the essentially national
markets for NPLs tend to remain of a small volume.

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(11)

The limited participation of credit purchasers has resulted in low demand, weakcompetition and low bid prices for portfolios of credit agreements on secondary markets,
which is a disincentive for credit institutions to sell non-performing credit agreements.
Therefore, there is a clear Union dimension to the development of markets for credits
granted by credit institutions and sold to credit purchasers. On the one hand, it should bepossible for credit institutions to sell non-performing credit agreements on a Union-wide
scale in efficient, competitive and transparent secondary markets. On the other hand,completion of the banking union and the CMU make it necessary to act in order to preventthe accumulation of non-performing credit agreements on credit institutions' balance sheets
so that they can continue to perform their role of financing the economy. Therefore, thisDirective covers credit purchasers acting in the course of their trade, business or profession
when they acquire a credit agreement only where that credit agreement is a non-performing
credit agreement.

(12)

Non-performing credit originally granted by a credit institution might become performingin the process of servicing the credit. In that case, credit servicers should be able tocontinue carrying out their activities, based on their authorisation as credit servicers inaccordance with this Directive.

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(13)

Certain Member States regulate credit servicing activities, but to varying degrees. Firstly,
only some Member States regulate those activities, and, those that do, define them very
differently. The increased regulatory compliance costs operate as a barrier to thedevelopment of expansion strategies by means of secondary establishment or cross-borderprovision of services. Secondly, a considerable number of Member States requireauthorisations for some of the activities that those credit servicers engage in. Thoseauthorisations impose different requirements and do not provide for possibilities ofcross-border scaling up. Again, that operates as a barrier to the provision of cross-borderservices. Finally, in some cases, local establishment is required by law, which hinders theexercise of the freedom to provide cross-border services.

(14)

While credit servicers can provide their services to credit institutions and to credit
purchasers that are not credit institutions, a competitive and integrated market for credit
servicers is linked to the development of a competitive and integrated market for credit
purchasers. Credit purchasers often decide to outsource credit servicing activities to otherentities, as they do not have the capacity to service credit themselves, and thus can be
reluctant to purchase credit from credit institutions if they cannot outsource
certain services.

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(15)

The lack of competitive pressure on the market for purchasing credit and for credit
servicing activities results in credit servicing firms charging credit purchasers high fees fortheir services and leads to low prices on secondary markets for credit. That reduces
incentives for credit institutions to offload their stock of NPLs.

(16)

Therefore, action at Union level is necessary in order to address the position of credit
purchasers and credit servicers in relation to non-performing credit originally granted bycredit institutions. However, this Directive is without prejudice to the rules of Union andnational law governing credit origination, including in cases when credit servicers can beconsidered to engage in credit intermediation. This Directive is also without prejudice tonational rules imposing additional requirements in respect of a credit purchaser or a credit
servicer as concerns the renegotiation of the terms and conditions of a credit agreement.

(17)

It is open to Member States to regulate credit servicing activities that do not fall within thescope of this Directive, such as services offered for credit agreements issued by non-credit
institutions or credit servicing activities performed by natural persons, including by
imposing requirements equivalent to those under this Directive. Those entities and natural
persons, however, would not benefit from the possibility of passporting such services toother Member States.

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(18)

This Directive should not affect restrictions under national law regarding the transfer of acreditor’s rights under a non-performing credit agreement, or a transfer of the
non-performing credit agreement itself, that is not terminated in accordance with national
civil law with the effect that all amounts payable under the credit agreement become
immediately due, where that is required for the transfer to an entity outside the banking
system. Accordingly, there will be Member States where, taking into account the nationalrules, the acquisition of non-performing credit agreements that are not past due, or are lessthan 90 days past due, or are not terminated in accordance with national civil law by
non-regulated creditors, will remain limited. It is open to Member States to regulate thetransfer of performing credit agreements, including by imposing requirements equivalent
to those under this Directive.

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(19)

This Directive should not affect Union law concerning judicial cooperation in civil matters,
notably the provisions on the law applicable to contractual obligations and on jurisdiction,
including the application of those acts and provisions in individual cases under Regulations(EC) No 593/20081 and (EU) No 1215/20122 of the European Parliament and of theCouncil. All creditors and any persons representing them are bound to respect Union law
in their dealings with the consumer and national authorities to ensure that consumer rights
are protected.

(20)

Credit servicers and credit purchasers should always act in good faith, treat borrowers
fairly and respect their privacy. They should not harass nor give misleading information toborrowers. In advance of the first debt collection and whenever requested by borrowers,
they should provide information to borrowers on, among others, the transfer that took
place, the identification and contact details of the credit purchaser and of the credit
servicer, where one is appointed, as well as information on the amounts due by theborrower and a statement to the effect that all relevant Union and national law continues
to apply.

1

2

Regulation (EC) No 593/2008 of the European Parliament and of the Council of
17 June 2008 on the law applicable to contractual obligations (Rome I) (OJ L 177, 4.7.2008,p. 6).
Regulation (EU) No 1215/2012 of the European Parliament and of the Council of
12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil
and commercial matters (OJ L 351, 20.12.2012, p. 1).

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(21)

In addition, this Directive does not reduce the scope of application of Union consumer
protection rules and, to the extent that credit purchasers qualify as creditors underDirectives 2008/48/EC1 and 2014/17/EU2 of the European Parliament and of the Council,
they should be subject to the specific obligations set out in Article 20 of
Directive 2008/48/EC and Article 35 of Directive 2014/17/EU, respectively. Moreover,this Directive is without prejudice to the protection of consumers guaranteed by
Directive 2005/29/EC of the European Parliament and of the Council3, which prohibits
unfair commercial practices including those carried out during the enforcement of acontract where a consumer is misled as to the consumer’s rights or obligations, or issubject to harassment, coercion or undue influence including in terms of the timing,
location, nature or persistence of the enforcement actions, in terms of the use of threatening
or abusive language or behaviour, or in terms of threats to take any action that cannot
legally be taken.

1

2

3

Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on
credit agreements for consumers and repealing Council Directive 87/102/EEC (OJ L 133,
22.5.2008, p. 66).
Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on
credit agreements for consumers relating to residential immovable property and amending
Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 (OJ L 60,
28.2.2014, p. 34).
Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005
concerning unfair business-to-consumer commercial practices in the internal market andamending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of
the European Parliament and of the Council and Regulation (EC) No 2006/2004 of theEuropean Parliament and of the Council (‘Unfair Commercial Practices Directive’)(OJ L 149, 11.6.2005, p. 22).

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(22)

Article 47 of the Charter of Fundamental Rights of the European Union ensures the right toa fair and public hearing by an independent and impartial tribunal and the possibility of
being advised, defended and represented by a lawyer. That can be of particular relevancefor the full and complete understanding of all the issues and legal arguments being
addressed and to ensure comprehensive preparation of court representation for the case indispute. Borrowers who lack sufficient resources should be able to resort to legal aid,
where that is necessary to ensure effective access to justice and under the conditions laid
down by the applicable national laws.

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(23)

1

2

Union credit institutions undertake credit servicing activities as part of their normal
business. They have the same obligations with regard to credit agreements that they haveissued themselves as those purchased from another credit institution. Since they are alreadyregulated and supervised, application of this Directive to their credit servicing orpurchasing activities would mean unnecessary duplication of authorisation and compliancecosts and therefore they are not covered by this Directive. The outsourcing by credit
institutions of credit servicing activities, in relation to both performing and non-performing
credit agreements, to credit servicers or to other third parties, is also outside the scope of
this Directive because credit institutions are already required to observe the applicableoutsourcing rules. Moreover, creditors that are non-credit institutions but are neverthelesssupervised by a competent authority of a Member State in accordance with
Directive 2008/48/EC or with Directive 2014/17/EU and undertake credit servicing
activities for credits granted to consumers as part of their normal business are not coveredby this Directive when performing credit servicing activities in that Member State.
Furthermore, alternative investment fund managers, management companies andinvestment companies (provided that an investment company has not designated amanagement company) authorised or registered under Directive 2009/65/EC of theEuropean Parliament and of the Council1 or Directive 2011/61/EU of theEuropean Parliament and of the Council2 should also not fall within the scope of thisDirective. Finally, there are some professions that undertake ancillary activities similar tocredit servicing activities as part of their profession, namely public notaries, lawyers andbailiffs that pursue their professional activities under national law, and that implement theenforcement of binding measures and, therefore, Member States should be able to exempt
those professions from the application of this Directive.

Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on thecoordination of laws, regulations and administrative provisions relating to undertakings forcollective investment in transferable securities (UCITS) (OJ L 302, 17.11.2009, p. 32).
Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on
Alternative Investment Fund Managers and amending Directives 2003/41/EC and2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174,
1.7.2011, p. 1).

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(24)

In order to allow existing credit purchasers and credit servicers to adapt to the requirementsof the national provisions transposing this Directive and, in particular, to allow credit
servicers to be authorised, this Directive allows entities that are currently providing credit
servicing activities under national law to continue to do so in their home Member State fora period of six months after the transposition deadline of this Directive. After the expiry ofthat six-month period, only credit servicers authorised under the national laws transposing
this Directive should be permitted to operate on the market.

(25)

Member States that already have in place rules equivalent to, or stricter than, thoseestablished in this Directive for credit servicing activities should be able to recognise in
their national law transposing this Directive the possibility for existing entities providing
credit servicing activities to be automatically recognised as authorised credit servicers.

(26)

The authorisation of a credit servicer to provide credit servicing activities throughout theUnion should be subject to a uniform and harmonised set of conditions that should beapplied in a proportionate manner by the competent authorities.

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(27)

To avoid a reduction in borrower protection and in order to promote trust, the conditions
for granting and maintaining an authorisation as a credit servicer should ensure that credit
servicers, persons who hold a qualifying holding in the credit servicer, and members of its
management or administrative organ, have a clean police record in relation to relevant
criminal offences linked to, among others, crimes against property, crimes related tofinancial activities, money laundering, fraud or crimes against physical integrity, and are
not subject to an insolvency procedure nor have previously been declared bankrupt, unlessthey have been reinstated in accordance with national law. Compliance with therequirement for members of the management or administrative organ of credit servicers tohave been transparent, open and cooperative in their past business dealings withsupervisory and regulatory authorities should be assessed based on the information
available to, or within the knowledge of, the competent authority at the time theauthorisation is granted. If no information is available, or if there is no knowledge of any
information, or if there is no past interaction with supervisory and regulatory authorities atthat time, then the requirement is deemed fulfilled.

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(28)

Member States should ensure that the management, as a whole, of a credit servicer has
adequate knowledge and experience to conduct the business in a competent andresponsible manner, according to the activity to be carried out. It is for each Member Stateto lay down the requirements regarding good repute, adequate knowledge and experience,but those should not impair the free movement of authorised credit servicers within theUnion. For that purpose, the EBA should develop guidelines to reduce the risk of divergent
interpretations of the requirements on adequate knowledge and experience. Further, toensure compliance with the rules for debtor protection as well as with the rules for theprotection of personal data, appropriate governance arrangements and internal control
mechanisms, as well as appropriate procedures for the recording and handling ofcomplaints, should be established and be subject to supervision. In addition, credit
servicers should have in place adequate anti-money laundering and counter terrorist
financing procedures where national provisions transposing Directive (EU) 2015/849 of
the European Parliament and of the Council1 designate credit servicers as obliged entities
for the purpose of preventing and combating money laundering and terrorist financing.
Moreover, credit servicers should be obliged to act fairly and with due consideration for
the financial situation of borrowers. Where debt advice services facilitating debt repayment
are available at national level, credit servicers should consider referring borrowers tosuch services.

1

Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on
the prevention of the use of the financial system for the purposes of money laundering or
terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament andof the Council, and repealing Directive 2005/60/EC of the European Parliament and of theCouncil and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).

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(29)

Member States should determine, in their national law transposing this Directive, whether
or not credit servicers in their territory are permitted to receive and hold funds fromborrowers while performing credit servicing activities. In cases where the receiving andholding of funds from borrowers is permitted in a Member State and credit servicers intend
to do so as part of their business model, additional requirements should apply to thosecredit servicers, in order to deal with the risks that could arise in cases of insolvency,
namely account and fund segregation, as well as in cases of the discharge of the borrower.
Where a credit servicer’s home Member State prohibits credit servicers from receiving andholding funds from borrowers, a credit servicer cannot then do so, neither in its home
Member State nor in any host Member State, even if a host Member State permits thereceiving and holding of funds, precisely because the credit servicer was not authorised tothat purpose by its home Member State. In contrast, where a home Member State does
permit credit servicers to receive and hold funds from borrowers and includes in its
national law the relevant requirements, a credit servicer should be able to receive and holdfunds from borrowers in its home Member State as well as in any host Member State that
also permits the receiving and holding of funds from borrowers.

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(30)

To avoid lengthy procedures and uncertainty, it is necessary to establish requirements
regarding the information that applicants for authorisation as a credit servicer are required
to submit, as well as reasonable deadlines for the issue of an authorisation and thecircumstances for its withdrawal. Where competent authorities withdraw an authorisationof a credit servicer that provides credit servicing activities in other Member States,
competent authorities of the host Member State and also of the Member State where thecredit was granted, when different from the host and the home Member States, should be
informed. Equally, an up-to-date public register or list should be established in the home
and the host Member States and made publicly available on the website of the competentauthorities to ensure transparency as regards the number and identity of authorised
credit servicers.

(31)

The contractual relationship between the credit servicer and the credit purchaser and theobligations of the credit servicer towards the credit purchaser should not be altered by theoutsourcing of credit servicing activities to credit service providers. Credit servicers should
be responsible for making sure that the outsourcing of their credit servicing activities tocredit service providers does not result in undue operational risk, nor in non-compliance by
the credit service provider with any requirements of Union or national law, nor restrict thecapacity of a regulatory supervisor to perform its duty and safeguard borrower rights.

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(32)

When a credit purchaser entrusts to a credit servicer the management and enforcement of acredit agreement, the credit purchaser delegates its rights and duties and also its directcontact with the borrower to the credit servicer while still remaining ultimately
responsible. Accordingly, the relationship between credit purchaser and credit servicer
should be clearly established in a written credit servicing agreement and it should bepossible for competent authorities to verify how such a relationship is determined.
Moreover, credit servicers should act fairly and with due consideration for the financial
situation of borrowers. To the extent that a credit purchaser does not itself perform theservicing of the credit agreements it acquires, Member States should be able to provide thatthe credit servicer and the credit purchaser are required to agree in the credit servicing
agreement that the credit servicer notifies the credit purchaser prior to outsourcing credit
servicing activities.

(33)

To ensure the right of a credit servicer to engage in cross-border activities and to provide
for their supervision, this Directive sets up a procedure for the exercise of the right of an
authorised credit servicer to engage in cross-border activities. Communication between
competent authorities of the home and the host Member States as well as with a credit
servicer should take place within reasonable deadlines. The competent authorities of theMember State where the credit was granted should also receive information on
cross-border activities from the competent authorities of the home Member State.

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(34)

A credit servicer carrying out activities in a host Member State should be subject to therestrictions and requirements established in the national law of that host Member State inaccordance with this Directive, including, where applicable, the prohibition on receiving
and holding funds from borrowers, that are not related to other authorisation requirementsof credit servicers. If, under the national provisions of a host Member State transposing thisDirective, additional requirements for authorisation as a credit servicer are imposed, such
additional requirements should not apply to credit servicers performing cross-border credit
servicing activities in that host Member State.

(35)

In order to ensure an effective and efficient supervision of cross-border credit servicers, a
specific framework should be created for cooperation between the competent authorities of
the home and of the host Member States and, where appropriate, the competent authoritiesof the Member State where the credit was granted. That framework should allow theexchange of information, while preserving its confidentiality, professional secrecy,
protection of individual and business rights, on- and off-site inspections, the provision ofassistance, the notification of results of checks and inspections and of any measures taken.

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(36)

An important prerequisite for the taking up of the role by credit purchasers and credit
servicers should be that they have the possibility of accessing all relevant information andMember States should make that possible, while at the same time observing Union andnational data protection rules. In that context, it is essential that credit institutions provide
detailed information to prospective credit purchasers so as to enable them to conduct theirown assessment of the value of a creditor’s rights under a non-performing credit
agreement, or of the non-performing credit agreement itself. Credit institutions should
provide that information only once during the process, either during the initial phase or thesubsequent phases, but in any event prior to the conclusion of the contract of transfer. Thatobligation to provide information is necessary and justified in order for prospective credit
purchasers to be able to make informed choices before entering into a transaction and,
therefore, it is legitimate for credit institutions to share borrowers’ personal data withprospective credit purchasers. Such information should be strictly limited to what isnecessary to enable prospective credit purchasers to assess the value of a creditor’s rights
under a non-performing credit agreement, or of the non-performing credit agreement itself,
and the likelihood of recovery of the value of that agreement. Member States should ensurethat the provision of information to prospective credit purchasers and its subsequent use
complies with the relevant Union data protection framework.

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(37)

Where a credit institution transfers non-performing credit agreements, it should be required
to inform its competent authority and the competent authorities of the host Member State,
on a biannual basis, of at least the aggregate outstanding balance of the transferred credit
portfolios, as well as the number and size of the credits included and whether the transfer
includes credit agreements concluded with consumers. For each credit portfolio transferredin a single transaction, the information provided should include the legal entity identifier(LEI) of the credit purchaser, or where applicable of its representative, or, where notavailable, the identity and address of the credit purchaser and, where applicable, of its
representative in the Union. Competent authorities should be able to require that the
information be provided on a quarterly basis instead, whenever they consider it necessary,
including due to the high number of transactions during a crisis period. The competentauthorities of the host Member State should be obliged to transmit that information to theauthorities competent to supervise the credit purchaser. Such transparency requirementsallow for a harmonised and effective monitoring of the transfer of credit agreements within
the Union. In order to comply with the principle of proportionality, competent authorities
should, in order to avoid duplication, take into account information that is already available
to them by other means, in particular as regards credit institutions. Member States should
ensure that notification requirements to competent authorities in respect of a credit
portfolio once such portfolio has been transferred to a credit purchaser remain the
responsibility of the credit servicer.

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(38)

The Action Plan recognised that credit institutions' data infrastructure would be
strengthened by having uniform and standardised data for non-performing credit
agreements. The EBA has developed data templates that provide information about credit
exposures in the banking book and allow potential buyers to evaluate the value of thecredit agreements and carry out their due diligence. On the one hand, applying such data
templates to credit agreements would reduce information asymmetries between potential
buyers and sellers of credit agreements and, thus, contribute to the development of afunctioning secondary market in the Union. On the other hand, where such data templates
are excessively detailed, they can generate an excessive burden for credit institutions
without any appreciable gain in information terms. Therefore, the EBA should carry out areview of the data templates with a view to further developing them into implementing
technical standards for credit institutions. Credit institutions should be required to use thedata templates for transfers of non-performing credit agreements, including transfers toother credit institutions. That obligation should apply to transfers of non-performing credit
agreements only, and does not encompass complex transactions where non-performing
credit agreements are included as a part of such a transaction, including sales of branches,sales of business lines or sales of clients’ portfolios not limited to non-performing credit
agreements and transfers as part of an ongoing restructuring operation of the selling credit
institution within insolvency, resolution or liquidation proceedings. In order to comply
with the principle of proportionality, those information requirements should be applied tocredit institutions in a proportionate manner having regard to the nature and size of thecredits.

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At the same time, the extent of the obligation of credit institutions to comply with data
templates should take into account the date of conclusion of the non-performing credit
agreements. Other sellers of credit agreements should be able to use those standards inorder to facilitate the valuation of credit agreements for sale. In addition, in the case of
securitisation transactions, where mandatory transparency templates are provided for, any
double reporting as a result of this Directive should be avoided.
(39)

The Commission should be empowered to adopt implementing technical standards,
developed by the EBA, in order to specify the templates to be used by credit institutions
for the provision of information required under this Directive. The Commission should
adopt those implementing technical standards by means of implementing acts pursuant to
Article 291 of the Treaty on the Functioning of the European Union and in accordancewith Article 15 of Regulation (EU) No 1093/2010.

(40)

As credit purchasers are not creating new credit but, instead, and as provided in thisDirective, are buying only existing non-performing credit agreements at own risk, they do
not cause prudential concerns and their potential contribution to systemic risk is negligible.
It is therefore not justified to require credit purchasers to apply for an authorisation but it ishowever important that Union and national consumer protection rules continue to apply
and the borrowers' rights continue to be those arising from the initial credit agreement.

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(41)

Third-country credit purchasers might make it harder for Union borrowers to rely on theirrights under Union law and for national authorities to supervise the enforcement of
non-performing credit agreements. Credit institutions might also be discouraged fromtransferring such non-performing credit agreements to third-country credit purchasers
because of the reputational risk involved. To the extent that the representative of athird-country purchaser of credits granted to natural persons, including consumers andindependent workers, or of credits granted to micro, small and medium-sized enterprises(SMEs) is not a credit institution, or a non-credit institution supervised by a competentauthority of a Member State in accordance with Directive 2008/48/EC or with
Directive 2014/17/EU, or a credit servicer authorised in the Union, that representative
should appoint such an entity in order to ensure that the same standards of borrowers’
rights are preserved after the transfer of the non-performing credit agreement.

(42)

Moreover, in order to better ensure that the same standards of consumers’ rights arepreserved after the transfer of a non-performing credit agreement, a credit purchaser
domiciled in the Union, or that has its registered office or, if under its national law it has noregistered office, its head office in the Union should also be required to appoint a credit
institution, or a non-credit institution supervised by a competent authority of a
Member State in accordance with Directive 2008/48/EC or with Directive 2014/17/EU, ora credit servicer, to perform credit servicing activities in respect of non-performing credit
agreements concluded with consumers.

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(43)

Host Member States should be able to extend the obligation to appoint a credit servicer in
relation to other credit agreements. In cases where the transfer of a credit portfolio includes
both credit agreements with consumers, other natural persons or SMEs for which theappointment of a credit institution, or of a non-credit institution supervised by a competentauthority of a Member State in accordance with Directive 2008/48/EC or with
Directive 2014/17/EU, or of a credit servicer, is required and simultaneously includes also
other credit agreements for which no such appointment is required, the credit purchaser or,
where applicable, its representative should comply with the appointment obligation in
respect of credit agreements with consumers, other natural persons or SMEs. The credit
servicer and the credit purchaser should comply with applicable Union and national law,and the national authorities in individual Member States should be given the necessary
powers to effectively supervise their activity.

(44)

When a credit purchaser, or its representative designated in accordance with this Directive,
is required to appoint a credit servicer, or a credit institution, or a non-credit institution
supervised by a competent authority of a Member State in accordance with
Directive 2008/48/EC or with Directive 2014/17/EU, and opts to manage and enforce itself
the rights and obligations related to a creditor’s rights under a non-performing credit
agreement, or the non-performing credit agreement itself, the credit purchaser, or its
representative designated in accordance with this Directive, is considered to be a credit
servicer, and should therefore be authorised under this Directive.

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(45)

Credit purchasers that use the services of credit servicers, or of credit institutions, or of
non-credit institutions supervised by a competent authority of a Member State inaccordance with Directive 2008/48/EC or with Directive 2014/17/EU, should inform thecompetent authorities of their home Member State thereof so as to allow relevant
competent authorities to exercise their supervisory powers as regards the conduct of thecredit servicer, or of the credit institution, or of the non-credit institution supervised by acompetent authority of a Member State in accordance with Directive 2008/48/EC or with
Directive 2014/17/EU, vis-à-vis the borrower. Credit purchasers should also inform in atimely manner the competent authorities in charge of their supervision if they engage adifferent credit servicer, credit institution, or non-credit institution supervised by acompetent authority of a Member State in accordance with Directive 2008/48/EC or with
Directive 2014/17/EU.

(46)

Credit purchasers that enforce the purchased credit agreement directly should do so incompliance with the law applicable to the credit agreement, including consumer protection
rules applicable to the borrower. National rules concerning in particular the enforcement ofcontracts, consumer protection and criminal law continue to apply and competentauthorities should ensure compliance of those credit purchasers with such rules on
Member States' territory.

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(47)

In order to facilitate the enforcement of the obligations set out in this Directive, where acredit purchaser is not domiciled in the Union, or does not have its registered office or, if
under its national law it has no registered office, its head office in the Union, national law
transposing this Directive should provide that, where a transfer of a credit agreement isconcluded, a third-country credit purchaser designates a representative that is domiciled in
the Union, or that does have its registered office or, if under its national law it has noregistered office, its head office in the Union, mandated to be addressed by the competentauthorities in addition to or instead of the credit purchaser. That representative is
responsible for the obligations imposed on credit purchasers by this Directive without
prejudice to obligations imposed on credit servicers. Credit purchasers transferring
non-performing credit agreements should inform the competent authority of the home
Member State, on a biannual basis and on an aggregated level, of at least the aggregate
outstanding balance of the transferred credit portfolios, as well as the number and size ofthe credits included, and whether the transfer includes credit agreements concluded with
consumers. For each portfolio transferred in a single transaction, the information provided
should include the legal entity identifier (LEI) of the credit purchaser, or where applicableof its representative in the Union, or, where not available, the identity and address of thecredit purchaser and, where applicable, of its representative in the Union. Competentauthorities should be able to require that the information be provided on a quarterly basis
instead, whenever they consider it necessary, including due to the high number oftransactions during a crisis period.

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(48)

At present, different authorities are entrusted with the authorisation and supervision of
credit servicers and credit purchasers in Member States, and therefore it is essential that
Member States clarify the role of such authorities and allocate adequate powers, especiallyas they might need to supervise entities engaged in providing services in otherMember States. In order to ensure efficient and proportionate supervision across the Union,
Member States should grant the necessary powers for competent authorities to carry out
their duties under this Directive, including the power to obtain necessary information, toinvestigate possible infringements of this Directive, to handle borrowers' complaints and to
impose administrative penalties and remedial measures, including the withdrawal of
authorisations. Where such administrative penalties and remedial measures are applied,
Member States should ensure that competent authorities apply them in a proportionate
manner and give reasons for their decisions and that, in addition, those decisions should be
subject to judicial review including in cases where competent authorities do not act within
the timeframes provided.

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(49)

The provisions concerning infringements of this Directive are without prejudice to a
Member State’s right to intervene in cases of infringements of national law relating to, forexample, consumer protection, to borrowers’ rights, or to criminal activities. In such cases,
the competent authorities of the host Member State and of the Member State where thecredit was granted are the ones competent to decide whether there has been an
infringement of national law and thus their powers are not limited by this Directive.

(50)

Since the performance of secondary markets for credit will depend to a large extent on thegood reputation of the entities involved, credit servicers should establish an efficientmechanism by which to treat complaints from borrowers. Member States should ensurethat the authorities competent for the supervision of credit purchasers and credit servicers
have effective and accessible procedures to deal with borrowers' complaints.

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(51)

Both Regulations (EU) 2016/6791 and (EU) 2018/17252 of the European Parliament and of
the Council apply to the processing of personal data for the purposes of this Directive. In
particular, where personal data is processed for the purposes of this Directive, the precise
purpose should be specified, the relevant legal basis referred to, the relevant security
requirements laid down in Regulation (EU) 2016/679 complied with, and the principles ofnecessity, proportionality, purpose limitation, and transparent and proportionate dataretention period respected. For those purposes, an industry-wide code of conduct, in
accordance with Article 40 of Regulation (EU) 2016/679, is preferred. Also, personal dataprotection by design and data protection by default should be embedded in all dataprocessing systems developed and used within the framework of this Directive. Equally,administrative cooperation and mutual assistance between the competent authorities of theMember States should be compatible with the rules on the protection of personal data laid
down in Regulation (EU) 2016/679, and in accordance with national data protection rules
implementing Union law.

1

2

Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016
on the protection of natural persons with regard to the processing of personal data and on thefree movement of such data, and repealing Directive 95/46/EC (General Data Protection
Regulation) (OJ L 119, 4.5.2016, p. 1).
Regulation (EU) 2018/1725 of the European Parliament and of the Council of
23 October 2018 on the protection of natural persons with regard to the processing of
personal data by the Union institutions, bodies, offices and agencies and on the freemovement of such data, and repealing Regulation (EC) No 45/2001 and Decision
No 1247/2002/EC (OJ L 295, 21.11.2018, p. 39).

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(52)

In order to ensure a high level of consumer protection, Union and national law provide fora number of rights and safeguards related to credit agreements granted to a consumer.
Those rights and safeguards apply in particular to the negotiation and conclusion of thecredit agreement, to the use of unfair business-to-consumer commercial practices as laid
down in Directive 2005/29/EC and to the performance or default of the credit agreement.
That is notably the case in relation to long-term consumer credit agreements falling within
the scope of Directive 2014/17/EU, in respect of the right of the consumer to discharge
fully or partially the consumer’s obligations under a credit agreement prior to the expiry ofthat credit agreement or to be informed by means of the European Standardised
Information Sheet, where applicable, on the possible transfer of the credit agreement to acredit purchaser. Borrower rights should also not be altered if the transfer of the credit
agreement between a credit institution and a credit purchaser takes the form of contract
novation. As a general principle, it should be ensured that borrowers are not worse off
following the transfer of their credit agreement from a credit institution to a credit
purchaser. This Directive should not prevent Member States from applying stricter
provisions in order to protect borrowers.

(53)

Without prejudice to other obligations under Directives 2008/48/EC and 2014/17/EU, andin order to ensure a high level of consumer protection, those Directives should be
amended, to ensure that the consumer is presented, in due time and prior to any
modifications to the terms and conditions of the credit agreement, with a clear andcomprehensive list of any such changes, the timescale for their implementation and thenecessary details as well as the name and address of the national authority to which theconsumer is able to lodge a complaint.

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(54)

The information regarding the modification of the terms and conditions of a credit
agreement under Directives 2008/48/EC and 2014/17/EU, as introduced by theamendments set out in this Directive, should not affect any consumer rights laid down in
Directives 2008/48/EC and 2014/17/EU, including information rights.

(55)

The importance placed by the Union legislator on the protection provided for consumers in
Council Directive 93/13/EEC1 and in Directives 2008/48/EC and 2014/17/EU, means thatthe assignment of a creditor’s rights under a credit agreement, or of the credit agreement
itself, to a credit purchaser should not affect the level of protection granted by Union law
to consumers in any way. Credit purchasers and credit servicers should therefore comply
with applicable Union and national law as applicable to the initial credit agreement and theborrower should retain the same level of protection as provided under applicable Unionand national law or as determined by Union or national conflict of law rules.
Member States should ensure that no costs related to the transfer of the credit agreement,
other than those already included in that credit agreement, are charged to the borrower. As
regards charges on consumers in the event of default, amendments should be introduced to
Directive 2008/48/EC requiring Member States to follow the same rules as inDirective 2014/17/EU on the placing of caps on fees and penalties.

1

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ L
95, 21.4.1993, p. 29).

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(56)

In respect of consumers, Directives 2008/48/EC and 2014/17/EU should be amended bythis Directive to establish that Member States should require creditors to have adequate
policies and procedures so that they make efforts to exercise, where appropriate,
reasonable forbearance before foreclosure proceedings are initiated. Account should betaken of the EBA Guidelines on arrears and foreclosure of 19 August 2015, of the EBA
Guidelines on management of non-performing and forborne exposures of 31 October 2018
and of the ECB Guidance to banks on non-performing loans of March 2017. When
deciding which forbearance measures to take, creditors should take into account theindividual circumstances of the consumer, the consumer’s interests and rights and theconsumer’s ability to repay the credit, including in particular if the credit agreement issecured by residential immovable property that is the consumer’s primary residence.
Forbearance measures should be able to consist of certain concessions to the consumer,
such as a total or partial refinancing of a credit agreement, or a modification of its existingterms and conditions including, among others, an extension of its term, a change of thetype of credit agreement, a deferral of payment of all or part of the instalment repayment
for a period, a change of interest rate, an offer of a payment holiday, partial repayments,
currency conversions, partial forgiveness and debt consolidation. Member States shouldhave appropriate forbearance measures in place at national level. The list of forbearance
measures provided in this Directive, as amendments to Directives 2008/48/EC
and 2014/17/EU, is not exhaustive, and therefore Member States remain free to provide for
additional measures.

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Likewise, it is open to Member States not to provide for a specific measure if so foreseen
at national level, as long as a reasonable number of measures remains available. Where
after foreclosure proceedings outstanding debt remains, Member States should ensure theprotection of minimum living conditions and put in place measures to facilitate debt
repayment while avoiding long-term over-indebtedness. At least where the price obtained
for the residential immovable property affects the amount owed by the consumer,
Member States should encourage creditors to take reasonable steps to obtain the best
efforts price for the foreclosed residential immovable property in the context of market
conditions. Member States should not prevent the parties to a credit agreement fromexpressly agreeing that the transfer of the security to the creditor is sufficient in order torepay the credit, in particular when the credit is secured by the consumer’s
primary residence.
(57)

In order to ensure that the level of protection of the consumer is not affected in the event ofan assignment to a third party of the creditor’s rights under a mortgage credit agreement orof the credit agreement itself, an amendment to Directive 2014/17/EU should be
introduced to establish that, in cases of a transfer of credit covered by that Directive, theconsumer is entitled to plead against the credit purchaser any defence which was available
to the consumer as against the original creditor and to be informed of the assignment.

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(58)

In accordance with the Joint Political Declaration of 28 September 2011 of Member States
and the Commission on explanatory documents1, Member States have undertaken toaccompany, in justified cases, the notification of their transposition measures with one ormore documents explaining the relationship between the components of a directive and thecorresponding parts of national transposition instruments. With regard to this Directive, theUnion legislator considers the transmission of such documents to be justified.

(59)

The European Data Protection Supervisor was consulted in accordance with Article 42(1)of Regulation (EU) 2018/1725 and delivered an opinion on 24 January 2019.

(60)

The efficient functioning of this Directive should be reviewed by the Commission, as theestablishment of an internal secondary market for non-performing credit agreements with ahigh level of consumer protection progresses. The Commission is well placed to analyse
specific cross-border issues that cannot be identified or properly addressed by individual
Member States, such as the risk of money laundering and terrorist financing that could
arise in relation to credit servicing and credit purchasers’ activities and the cooperation
between competent authorities from different Member States. It is therefore appropriatethat in its review of this Directive the Commission should also include a thoroughassessment of the money laundering and terrorist financing risks associated with theactivities performed by credit servicers and credit purchasers and the administrative
cooperation between competent authorities.

1

OJ C 369, 17.12.2011, p. 14.

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(61)

Since the objectives of this Directive, namely, to enhance the development of secondary
markets for NPLs in the Union while ensuring further strengthened protection ofborrowers, in particular of consumers, cannot be sufficiently achieved by theMember States but can rather, by reason of its scale and effects, be better achieved atUnion level, the Union may adopt measures, in accordance with the principle ofsubsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with theprinciple of proportionality as set out in that Article, this Directive does not go beyond
what is necessary in order to achieve those objectives,

HAVE ADOPTED THIS DIRECTIVE:

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Title I
Subject matter, scope and definitions

Article 1
Subject matter
This Directive lays down a common framework and requirements for:(a)credit servicers of a creditor’s rights under a non-performing credit agreement, or of the
non-performing credit agreement itself, issued by a credit institution established in theUnion, who act on behalf of a credit purchaser;(b)credit purchasers of a creditor’s rights under a non-performing credit agreement, or of the
non-performing credit agreement itself, issued by a credit institution established in
the Union.

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Article 2
Scope
1.

This Directive shall apply to:(a)credit servicers acting on behalf of a credit purchaser in respect of a creditor’s rights
under a non-performing credit agreement, or of the non-performing credit agreement
itself, issued by a credit institution established in the Union in accordance withapplicable Union and national law;(b)credit purchasers of a creditor’s rights under a non-performing credit agreement, orof the non-performing credit agreement itself, issued by a credit institution
established in the Union in accordance with applicable Union and national law.

2.

With regard to credit agreements falling within its scope, this Directive shall not affectcontract law principles nor civil law principles under national law with regard to thetransfer of a creditor’s rights under a credit agreement, or of the credit agreement itself, nor
the protection granted to consumers or borrowers pursuant in particular to Regulations(EC) No 593/2008 and (EU) No 1215/2012, and Directives 93/13/EEC, 2008/48/EC,
2014/17/EU and the national provisions transposing those Directives or other relevant
provisions of Union and national law relating to consumer protection andborrowers’ rights.

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3.

This Directive shall not affect the restrictions imposed in Member States’ national laws
regarding the transfer of a creditor’s rights under a non-performing credit agreement, or of
the non-performing credit agreement itself, that is not past due, or is less than 90 days pastdue, or is not terminated in accordance with national civil law.

4.

This Directive shall not affect requirements in Member States’ national laws regarding theservicing of a creditor’s rights under a credit agreement, or of the credit agreement itself,
when the credit purchaser is a securitisation special purpose entity as defined in Article 2,
point (2), of Regulation (EU) 2017/2402 of the European Parliament and of the Council1 as
long as such national laws:(a)do not affect the level of consumer protection provided by this Directive;(b)ensure that competent authorities receive the necessary information from credit
servicers.

5.

This Directive shall not apply to the following:(a)the servicing of a creditor’s rights under a credit agreement, or of the credit
agreement itself, carried out by:(i)1

a credit institution established in the Union;

Regulation (EU) 2017/2402 of the European Parliament and of the Council of
12 December 2017 laying down a general framework for securitisation and creating a
specific framework for simple, transparent and standardised securitisation, and amending
Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and Regulations (EC) No 1060/2009
and (EU) No 648/2012 (OJ L 347, 28.12.2017, p. 35).

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(ii)

an alternative investment fund manager (AIFM) authorised or registered inaccordance with Directive 2011/61/EU, or a management company, or aninvestment company authorised in accordance with Directive 2009/65/EC
provided that the investment company has not designated a managementcompany under that Directive, on behalf of the fund it manages;(iii) a non-credit institution subject to supervision by a competent authority of a
Member State in accordance with Article 20 of Directive 2008/48/EC orArticle 35 of Directive 2014/17/EU when performing activities in that
Member State;(b)the servicing of a creditor’s rights under a credit agreement, or of the credit
agreement itself, that was not issued by a credit institution established in the Union
except where the creditor’s rights under the credit agreement, or the credit agreement
itself, is replaced by a credit agreement issued by such credit institution;(c)the purchase of a creditor’s rights under a non-performing credit agreement, or of the
non-performing credit agreement itself, by a credit institution established in
the Union;(d)the transfer of a creditor’s rights under a credit agreement, or of the credit agreement
itself, transferred before the date referred to in Article 32(2), first subparagraph.

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6.

Member States may exempt from the application of this Directive the servicing of acreditor’s rights under a credit agreement, or of the credit agreement itself, carried out by
public notaries and bailiffs as defined by national law or lawyers as defined in Article 1(2),point (a), of Directive 98/5/EC of the European Parliament and of the Council1 when
conducting credit servicing activities as part of their profession.

Article 3
Definitions
For the purposes of this Directive, the following definitions apply:(1)‘credit institution’ means a credit institution as defined in Article 4(1), point (1), ofRegulation (EU) No 575/2013;(2)‘creditor’ means a credit institution that has issued a credit, or a credit purchaser;(3)‘borrower’ means a legal or natural person who has concluded a credit agreement with acredit institution, including its legal successor or assignee;(4)‘credit agreement’ means an agreement as originally issued, modified or replaced, whereby
a credit institution grants a credit in the form of a deferred payment, a loan or other similar
financial accommodation;1

Directive 98/5/EC of the European Parliament and of the Council of 16 February 1998 tofacilitate practice of the profession of lawyer on a permanent basis in a Member State otherthan that in which the qualification was obtained (OJ L 77, 14.3.1998, p. 36).

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(5)

‘credit servicing agreement’ means a written contract concluded between a credit
purchaser and a credit servicer concerning the services to be provided by the credit servicer
on behalf of the credit purchaser;(6)‘credit purchaser’ means any natural or legal person, other than a credit institution, thatpurchases a creditor’s rights under a non-performing credit agreement, or the
non-performing credit agreement itself, in the course of its trade, business or profession, in
accordance with applicable Union and national law;(7)

‘credit service provider’ means a third party used by a credit servicer to perform any of thecredit servicing activities;(8)‘credit servicer’ means a legal person that, in the course of its business, manages andenforces the rights and obligations related to a creditor’s rights under a non-performing
credit agreement, or to the non-performing credit agreement itself, on behalf of a credit
purchaser, and carries out at least one or more credit servicing activities;(9)‘credit servicing activities’ means one or more of the following activities:(a)collecting or recovering from the borrower, in accordance with national law, any
payments due related to a creditor’s rights under a credit agreement or to the credit
agreement itself;

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(b)

renegotiating with the borrower, in accordance with national law, any terms andconditions related to a creditor’s rights under a credit agreement, or of the credit
agreement itself, in line with the instructions given by the credit purchaser, where thecredit servicer is not a credit intermediary as defined in Article 3, point (f), of
Directive 2008/48/EC or in Article 4, point (5), of Directive 2014/17/EU;(c)administering any complaints relating to a creditor’s rights under a credit agreement
or to the credit agreement itself;(d)informing the borrower of any changes in interest rates or charges or of any
payments due related to a creditor’s rights under a credit agreement or to the credit
agreement itself;(10)‘home Member State’ means, with respect to a credit servicer, the Member State in which
its registered office is situated or, if under its national law it has no registered office, theMember State in which its head office is situated or, with respect to a credit purchaser, theMember State in which the credit purchaser or its representative is domiciled, or its
registered office is situated or, if under its national law it has no registered office, theMember State in which its head office is situated;(11)‘host Member State’ means the Member State, other than the home Member State, inwhich a credit servicer has established a branch or where it provides credit servicing
activities, and in any event where the borrower is domiciled, or its registered office issituated or, if under its national law it has no registered office, the Member State in which
its head office is situated;

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(12)

‘consumer’ means a natural person who, in credit agreements covered by this Directive, isacting for purposes which are outside his trade, business or profession;(13)‘non-performing credit agreement’ means a credit agreement that is classified as a
non-performing exposure in accordance with Article 47a of Regulation (EU) No 575/2013.

Title II
Credit servicers
Chapter I
Authorisation of credit servicers

Article 4
General requirements
1.

Member States shall require a credit servicer to obtain an authorisation in a home
Member State before commencing its activities within its territory in accordance with therequirements set out in the national provisions transposing this Directive.

2.

Member States shall confer the power to grant an authorisation referred to in paragraph 1of this Article upon the competent authorities designated pursuant to Article 21(3).

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Article 5
Requirements for granting an authorisation
1.

Without prejudice to Article 6, Member States shall lay down the following requirements
for the granting of an authorisation referred to in Article 4(1):(a)

the applicant is a legal person as referred to in Article 54 of the Treaty on the
Functioning of the European Union and its registered office or, if under its nationallaw it has no registered office, its head office, is in the Member State in which theapplicant is seeking authorisation;(b)

the members of the applicant’s management or administrative organ are of
sufficiently good repute, which is demonstrated by proving that:(i)they have a clean police record or other national equivalent 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 or to physical integrity, and also in relation to any otheroffences under laws relating to companies, bankruptcy, insolvency orconsumer protection;(ii)

the cumulative effects of minor incidents do not impinge on their good repute;(iii) they have always been transparent, open and cooperative in their past businessdealings with supervisory and regulatory authorities;

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(iv) they are not subject to any ongoing insolvency procedure nor have previously
been declared bankrupt unless reinstated in accordance with national law;(c)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;(d)

the persons who hold qualifying holdings in the applicant within the meaning of
Article 4(1), point (36) of Regulation (EU) No 575/2013 are of sufficiently good
repute, which is demonstrated by fulfilling the requirements set out in points (b)(i)and (iv) of this paragraph;(e)the applicant has in place robust governance arrangements and adequate internal
control mechanisms, including risk management and accounting procedures, which
ensure respect for borrower rights and compliance with the laws governing acreditor’s rights under a credit agreement, or the credit agreement itself, and with
Regulation (EU) 2016/679;(f)

the applicant applies an appropriate policy ensuring compliance with rules for theprotection, and the fair and diligent treatment, of borrowers, including by taking into
account their financial situation and, where available, the need for such borrowers to
be referred to debt advice or social services;(g)the applicant has in place adequate and specific internal procedures that ensure therecording and handling of complaints from borrowers;

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(h)

the applicant has in place adequate anti-money laundering and counter terrorist
financing procedures where national provisions transposing Directive (EU) 2015/849
designate credit servicers as obliged entities for the purpose of preventing andcombating money laundering and terrorist financing;(i)the applicant is subject by virtue of applicable national law to reporting and public
disclosure requirements.

2.

The EBA shall, after consulting all relevant stakeholders and reflecting all interests
involved, issue guidelines in accordance with Article 16 of Regulation (EU) No 1093/2010
for the requirements set out in paragraph 1, point (c), of this Article.

3.

The competent authorities of the home Member State shall refuse an authorisation referred
to in Article 4(1) where the applicant does not comply with the requirements set out inparagraph 1 of this Article and, where relevant, in Article 6(2), point (a).

Article 6
Ability to hold funds
1.

Member States shall determine whether credit servicers, when performing credit servicing
activities in their territory, are either:(a)allowed to receive and hold funds from borrowers in order to transfer those funds tocredit purchasers; or(b)prohibited from receiving and holding funds from borrowers.

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2.

In cases where credit servicers are allowed to receive and hold funds from borrowers underparagraph 1, point (a), Member States shall:(a)lay down, in addition to the requirements for the granting of an authorisation set out
in Article 5(1), a requirement that the applicant has a separate account in a credit
institution into which all funds received from borrowers are to be credited and kept
until their channelling to the respective credit purchaser, under the conditions agreed
with the credit purchaser;(b)

ensure that those funds are protected in accordance with national law in the interestof the credit purchasers against the claims of the other creditors of the credit
servicers, in particular in the event of insolvency;(c)determine that, when a borrower makes a payment to a credit servicer in order to,partially or totally, reimburse the amounts due related to a creditor’s rights under anon-performing credit agreement, or to the non-performing credit agreement itself,that payment is treated as having been paid to the credit purchaser;(d)require a credit servicer to deliver a receipt or a letter of discharge to the borrower,
on paper or another durable medium, whenever the credit servicer receives funds
from the borrower, acknowledging the amounts received.

3.

Where a credit servicer does not intend to receive and hold funds from borrowers as part ofits business model, the credit servicer shall convey that intention in its application for theauthorisation referred to in Article 4(1). In such cases, the requirements laid down inaccordance with paragraph 2, point (a), of this Article shall not apply.

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Article 7
Procedure for authorisation of credit servicers
1.

Member States shall establish a procedure for the authorisation of credit servicers thatenables an applicant to submit an application and provide all the information necessary forthe competent authority of the home Member State to verify that the applicant has satisfied
all the conditions laid down in the national provisions transposing Article 5(1), and, where
relevant, in Article 6(2), point (a).

2.

The application for authorisation of credit servicers referred to in paragraph 1 shall beaccompanied by the following:(a)evidence of the applicant’s legal status and a copy of its act of incorporation and of
the company by-laws;(b)

the address of the applicant’s head office or its registered office;(c)the identity of the members of the applicant’s management or administrative organ
and the persons who hold qualifying holdings within the meaning of Article 4(1),point (36), of Regulation (EU) No 575/2013;(d)evidence that the applicant fulfils the conditions laid down in Article 5(1), points (b)and (c);PE-CONS 54/21

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(e)

evidence that the persons who hold qualifying holdings within the meaning of
Article 4(1), point (36), of Regulation (EU) No 575/2013 fulfil the conditions laid
down in Article 5(1), point (d), of this Directive;(f)evidence of the governance arrangements and internal control mechanisms referred
to in Article 5(1), point (e);(g)

evidence of the policy referred to in Article 5(1), point (f);(h)

evidence of the internal procedures referred to in Article 5(1), point (g);(i)

evidence of the procedures referred to in Article 5(1), point (h);(j)

where relevant, evidence of the existence of a separate account in a credit institution
as provided for in Article 6(2), point (a);(k)
3.

any outsourcing agreement as referred to in Article 12(1).

Member States shall ensure that the competent authorities of a home Member State assess,within 45 days of receipt of the application for authorisation, whether that applicationis complete.

4.

Member States shall ensure that, within 90 days of receipt of a complete application or, if
the application is considered incomplete, of receipt of the required information, thecompetent authorities of the home Member State notify the applicant whether theauthorisation is granted or refused and provide reasons for refusal.

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5.

Member States shall ensure that an applicant has the right of appeal before a tribunal incases where the competent authorities of the home Member State decide to refuse anapplication for authorisation pursuant to Article 5(3) and also in cases where, within thetime limit provided for in paragraph 4 of this Article, no decision is taken by the competentauthorities in respect of the application.

Article 8
Withdrawal of authorisation
1.

Member States shall ensure that the competent authorities of the home Member State havethe necessary supervisory and investigatory powers, and sanctioning powers, in accordancewith Article 22 in order to withdraw the authorisation granted to a credit servicer, where
any of the following applies to such a credit servicer:(a)does not make use of the authorisation within 12 months of its grant;(b)expressly renounces the authorisation;(c)

has ceased to engage in the activities of a credit servicer for more than 12 months;(d)

has acquired an authorisation through false statements or other irregular means;(e)no longer fulfils the requirements for the granting of an authorisation as a credit
servicer set out in Article 5(1) and, where relevant, in Article 6(2) point (a);PE-CONS 54/21

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(f)

commits a serious infringement of the applicable rules, including the national
provisions transposing this Directive, or of other consumer protection rules,
including applicable rules of the host Member State and of the Member State where
the credit was granted.

2.

Where an authorisation is withdrawn in accordance with paragraph 1 of this Article,
Member States shall ensure that the competent authorities of the home Member State
immediately inform the competent authorities of the host Member State in cases where thecredit servicer provides services under Article 13, and also the competent authorities of theMember State where the credit was granted, when different from the host and the home
Member States.

Article 9
Register of authorised credit servicers
1.

Member States shall ensure that the competent authorities establish and maintain at least alist or, where considered more appropriate, a national register, of all credit servicers
authorised to provide services within their territory, including credit servicers providing
services under Article 13.
The EBA shall develop guidelines in accordance with Article 16 of Regulation (EU)No 1093/2010 for establishing and maintaining such lists or registers and specifying thetypes of information included in them in order to guarantee a level playing field across theUnion and transparency for credit purchasers and for borrowers.

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2.

The list or register referred to in paragraph 1 shall be made publicly accessible online on
the website of the competent authorities and shall be updated on a regular basis.

3.

Where an authorisation has been withdrawn pursuant to Article 8, the competentauthorities shall update the list or register referred to in paragraph 1 of this Article
without delay.

Article 10
Relationship with the borrower, communicationof the transfer and subsequent communications
1.

Member States shall require that credit purchasers and credit servicers, in theirrelationships with borrowers:(a)

act in good faith, fairly and professionally;(b)

provide information to borrowers that is not misleading, unclear or false;(c)respect and protect the personal information and privacy of borrowers;(d)communicate with borrowers in a way that does not constitute harassment, coercion
or undue influence.

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2.

Member States shall ensure that, after any transfer of a creditor’s rights under anon-performing credit agreement, or of the non-performing credit agreement itself, to acredit purchaser, and always in advance of the first debt collection, but also wheneverrequested by the borrower, the credit purchaser or, when appointed to perform credit
servicing activities, the entity referred to in Article 2(5), point (a)(i) or (iii), or the credit
servicer, sends to the borrower a communication, on paper or on another durable medium,that includes at least the following:(a)information on the transfer that took place, including the date of transfer;(b)

the identification and contact details of the credit purchaser;(c)when appointed, the identification and contact details of the credit servicer or of theentity referred to in Article 2(5), point (a)(i) or (iii);(d)when appointed, evidence regarding the authorisation of a credit servicer granted
pursuant to Article 7;(e)where relevant, the identification and contact details of the credit service provider;(f)presented in a prominent way, a contact reference point at the credit purchaser or,
when appointed to perform credit servicing activities, at the entity referred to in
Article 2(5), point (a)(i) or (iii), or at the credit servicer and, where relevant, at thecredit service provider, from which to receive information when needed;

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(g)

information on the amounts due by the borrower at the time of the communication,
detailing what is due as capital, interests, fees and other permitted charges;(h)a statement to the effect that all relevant Union and national law concerning inparticular the enforcement of contracts, consumer protection, borrower’s rights andcriminal law continues to apply;(i)the name, address and contact details of the competent authorities of theMember State in which the borrower is domiciled, or its registered office is situatedor, if under its national law it has no registered office, the Member State in which its
head office is situated and to which the borrower can submit a complaint.

The communication provided for in the first subparagraph shall be written in language
which is clear and understandable for the general public.
3.

Member States shall ensure that, in all subsequent communications with the borrower, thecredit purchaser or, when appointed to perform credit servicing activities, the entity
referred to in Article 2(5), point (a)(i) or (iii), or the credit servicer, includes theinformation set out in paragraph 2, point (f) of this Article, except where it is the firstcommunication after the appointment of a new credit servicer, in which case theinformation set out in paragraph 2, points (c) and (d) of this Article, shall also be included.

4.

Paragraphs 2 and 3 shall be without prejudice to any additional requirements regarding
communications provided for in other applicable Union or national law.

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Article 11
Contractual relationship between a credit servicer and a credit purchaser
1.

When a credit purchaser does not itself perform credit servicing activities, Member Statesshall ensure that the appointed credit servicer provides its services in respect of the
management and enforcement of a creditor’s rights under a non-performing credit
agreement, or of the non-performing credit agreement itself, on the basis of a credit
servicing agreement with the credit purchaser.

2.

The credit servicing agreement referred to in paragraph 1 shall provide for the following:(a)a detailed description of credit servicing activities to be carried out by the credit
servicer;(b)

the level of remuneration of the credit servicer or how the remuneration is to be
calculated;(c)the extent to which the credit servicer can represent the credit purchaser in relation to
the borrower;(d)an undertaking by the parties to comply with the Union and national law applicable
to a creditor’s rights under a credit agreement, or to the credit agreement itself,
including in respect of consumer and data protection;(e)a clause requiring the fair and diligent treatment of the borrowers.

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3.

Member States shall ensure that the credit servicing agreement referred to in paragraph 1
contains a requirement pursuant to which the credit servicer notifies the credit purchaser
prior to outsourcing any of its credit servicing activities.

4.

Member States shall ensure that the credit servicer keeps and maintains the following
records for at least five years from the date on which the credit servicing agreement
referred to in paragraph 1 is terminated, or for the duration of the statutory limitation
period applicable in the home Member State, but in either case for a period of no longer
than 10 years:(a)relevant correspondence with both the credit purchaser and the borrower, under theconditions provided for under applicable national law;(b)

relevant instructions received from the credit purchaser in respect of a creditor’srights under each non-performing credit agreement, or the non-performing credit
agreement itself, that it manages and enforces on behalf of that credit purchaser,
under the conditions provided for under applicable national law;(c)5.

the credit servicing agreement.

Member States shall ensure that the credit servicer makes the records referred to inparagraph 4 available to competent authorities upon request.

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Article 12
Outsourcing by a credit servicer
1.

Member States shall ensure that where a credit servicer uses a credit service provider toperform any of the credit servicing activities, the credit servicer remains fully responsible
for complying with all obligations under national provisions transposing this Directive.
The outsourcing of those credit servicing activities shall be subject to thefollowing conditions:(a)the conclusion of a written outsourcing agreement between the credit servicer and thecredit service provider under which the credit service provider is required to comply
with the applicable legal provisions, including national provisions transposing thisDirective, and the relevant Union or national law applicable to a creditor’s rights
under a credit agreement, or to the credit agreement itself;(b)

the outsourcing to a credit service provider of all credit servicing activities at thesame time is forbidden;(c)the contractual relationship between the credit servicer and the credit purchaser andthe obligations of the credit servicer towards the credit purchaser or towards
borrowers is not altered by the outsourcing agreement with the credit
service provider;

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(d)

the compliance of a credit servicer with the requirements of its authorisation as set
out in Article 5(1) is not affected by the outsourcing of some of its credit
servicing activities;(e)the outsourcing to the credit service provider does not prevent the supervision bycompetent authorities of a credit servicer in accordance with Articles 14 and 21;(f)

the credit servicer has direct access to all relevant information concerning the credit
servicing activities outsourced to the credit service provider;(g)after the outsourcing agreement is terminated, the credit servicer has the expertiseand resources to be able to provide the outsourced credit servicing activities.

The outsourcing of credit servicing activities shall not be undertaken in such a way as toimpair the quality of the credit servicer’s internal control, or the soundness or continuity of
its credit servicing activities.
2.

Member States shall ensure that the credit servicer informs the competent authorities of thehome Member State and, where applicable, of the host Member State, prior to outsourcing
its credit servicing activities in accordance with paragraph 1.

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3.

Member States shall ensure that the credit servicer keeps and maintains records of relevant
instructions provided to the credit service provider, in accordance with the conditions
provided for under applicable national law, and of the outsourcing agreement referred to inparagraph 1 for a period of at least five years from the date on which the outsourcing
agreement is terminated, or for the duration of the statutory limitation period applicable in
the Member State, but in either case up to a maximum period of 10 years.

4.

Member States shall ensure that the credit servicer and the credit service provider make theinformation referred to in paragraph 3 available to competent authorities upon request.

5.

Member States shall ensure that credit service providers are not permitted to receive andhold funds from borrowers.

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Chapter II
Cross-border credit servicing activities

Article 13
Freedom to provide credit servicing activities in a host Member State
1.

Member States shall ensure that a credit servicer having obtained an authorisation inaccordance with Article 4(1) in a home Member State has the right to provide in the Union
those services that are covered by that authorisation, without prejudice to any restrictions
or requirements established in the national law of the host Member State in accordancewith this Directive, including, where applicable, a prohibition on receiving and holding
funds from borrowers, that are not related to other authorisation requirements of credit
servicers, or to those established for the renegotiation of the terms and conditions related toa creditor’s rights under a credit agreement or of the credit agreement itself.

2.

Member States shall ensure that where a credit servicer having obtained an authorisation inaccordance with Article 4(1) in a home Member State intends to provide services in a host
Member State, the credit servicer submits to the competent authority of the home
Member State the following information:(a)the host Member State in which the credit servicer intends to provide services and,
where that information is already known to the credit servicer, the Member State
where the credit was granted, when different from the host and the home
Member States;

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(b)

where applicable, the address of the credit servicer’s branch established in the host
Member State;(c)where applicable, the identity and address of the credit service provider in the host
Member State;(d)the identity of the persons responsible for managing the provision of credit servicing
activities in the host Member State;(e)where applicable, details of the measures taken to adapt the internal procedures,
governance arrangements and internal control mechanisms of the credit servicer inorder to ensure compliance with the laws applicable to a creditor’s rights under acredit agreement or to the credit agreement itself;(f)a description of the procedure established in order to comply with the anti-money
laundering and counter terrorist financing rules, whereby the national law of the host
Member State transposing Directive (EU) 2015/849 designates credit servicers as
obliged entities for the purpose of preventing and combating money laundering andterrorist financing;(g)that the credit servicer has appropriate means to communicate in the language of thehost Member State or in the language of the credit agreement;(h)whether or not the credit servicer is authorised in its home Member State to receiveand hold funds from borrowers.

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3.

The competent authorities of the home Member State shall, within 45 days of receipt of all
information referred to in paragraph 2, communicate that information to the competentauthorities of the host Member State, which shall acknowledge receipt thereof without
delay. The competent authorities of the home Member State shall thereafter inform thecredit servicer of the date on which the information was communicated to the competentauthorities of the host Member State and the date on which those competent authorities
acknowledge receipt of the information. The competent authorities of the home
Member State shall also communicate all information referred to in paragraph 2 to thecompetent authorities of the Member State where the credit was granted, when different
from the host and the home Member States.

4.

Member States shall ensure that a credit servicer has the right of appeal before a tribunal
where the competent authorities of the home Member State fail to communicate theinformation referred to in paragraph 2.

5.

Member States shall ensure that the credit servicer is able to start providing services in thehost Member State from the earlier of the following:(a)receipt of the communication from the competent authorities of the host
Member State acknowledging receipt of the communication referred to inparagraph 3;(b)in the absence of any receipt of the communication referred to in point (a) of thisparagraph, after the expiry of two months from the date of submission of all
information referred to in paragraph 2 to the competent authorities of the host
Member State.

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6.

Member States shall ensure that a credit servicer informs the competent authorities of thehome Member State of any subsequent change to the information that is required to becommunicated in accordance with paragraph 2. In such cases, Member States shall ensurecompliance with the procedure set out in paragraphs 3, 4 and 5.

7.

Member States shall ensure that the competent authorities of the host Member State recordin the list or register referred to in Article 9 the credit servicers which are authorised toprovide credit servicing activities in their territory and the details of the home
Member State.

Article 14
Supervision of credit servicers which provide cross-border services
1.

Member States shall ensure that the competent authorities of the home Member Statereview and evaluate the ongoing compliance, by a credit servicer which performs credit
servicing activities in a host Member State, with the requirements of this Directive.

2.

Member States shall ensure that the competent authorities of a home Member State are
empowered to supervise, investigate and impose administrative penalties and remedial
measures on credit servicers in respect of the requirements of this Directive when
performing their credit servicing activities in a host Member State.

3.

Member States shall ensure that the competent authorities of the home Member State
communicate the measures taken in respect of the credit servicer to the competentauthorities of the host Member State and, where appropriate, of the Member State where
the credit was granted, when different from the host and the home Member States.

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4.

Member States shall ensure that where a credit servicer performs credit servicing activities
in a host Member State, the competent authorities of the home Member State and thecompetent authorities of the host Member State and, where appropriate, of theMember State where the credit was granted, when different from the host and the home
Member States shall cooperate closely in the performance of their functions and duties, inparticular when carrying out checks, investigations and on-site inspections.

5.

Member States shall ensure that the competent authorities of the home Member State, inthe exercise of their functions and duties provided for in this Directive, ask the competentauthorities of the host Member State for their assistance in carrying out an on-site
inspection of a branch set up, or of a credit service provider appointed, in a host
Member State. The on-site inspection of a branch or of a credit service provider shall be
conducted in accordance with the law of the Member State where the inspection iscarried out.

6.

Member States shall further ensure that the competent authorities of the host Member Stateare entitled to decide on the most appropriate measures to be taken in each individual casein order to meet the request of assistance by the competent authorities of the home
Member State.

7.

Where the competent authorities of the host Member State decide to conduct on-site
inspections on behalf of the competent authorities of the home Member State, they shallinform the competent authorities of the home Member State of the results thereof
without delay.

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8.

On their own initiative, the competent authorities of the host Member State may conduct
checks, inspections and investigations in respect of credit servicing activities provided
within their territory by a credit servicer authorised in a home Member State. The
competent authorities of the host Member State shall provide the results of those checks,
inspections and investigations to the competent authorities of the home Member State
without delay.

9.

Member States shall ensure that where the competent authorities of the host Member State
have evidence that a credit servicer performing credit servicing activities within its
territory, as provided for in Article 13, infringes the applicable rules, including obligations
arising from the national provisions transposing this Directive, they transmit that evidence
to the competent authorities of the home Member State and request that they takeappropriate measures, without prejudice to the supervisory, investigatory and sanctioning
powers of the competent authorities of the host Member State regarding the credit servicer
under national law, namely those applicable to the credit or the credit agreement.

10.

Member States shall ensure that where the competent authorities of the Member State
where the credit was granted, when different from the host and the home Member States,
have evidence that a credit servicer infringes the obligations provided for in this Directive,
or in the national rules applicable to the credit or the credit agreement, they transmit that
evidence to the competent authorities of the home Member State and request that they takeappropriate measures, without prejudice to the supervisory, investigatory and sanctioning
powers of the competent authorities of the Member State where the credit was granted,
when different from the host and the home Member States.

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11.

Member States shall ensure that the competent authorities of the home Member State
communicate details of any administrative or other procedure initiated in respect of theevidence provided by the host Member State, or of any administrative penalties andremedial measures taken against the credit servicer, or of a reasoned decision why nomeasures were taken, to the competent authorities of the host Member State that referred
the evidence no later than two months from the date of the request referred to inparagraph 9. Where a procedure has been initiated, the competent authorities of the home
Member State shall regularly inform the competent authorities of the host Member State
about its status.

12.

Where a credit servicer continues to infringe the applicable rules, including its obligations
under this Directive, and after the competent authorities of the host Member State haveinformed the home Member State thereof, Member States shall ensure that the competentauthorities of the host Member State are entitled to impose appropriate administrative
penalties and remedial measures in order to ensure compliance with this Directive wheneither of the following apply:(a)no adequate and effective steps were taken by the credit servicer to rectify the
infringement in a reasonable time; or(b)in an urgent case, where immediate action is necessary in order to address a serious
threat to the collective interests of the borrowers.

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The competent authorities of the host Member State may impose the administrative
penalties and remedial measures referred to in the first subparagraph notwithstanding any
administrative penalties and remedial measures already imposed by the competentauthorities of the home Member State.
In addition, the competent authorities of the host Member State may prohibit further
activities of a credit servicer that infringes the applicable rules, including its obligations
under this Directive, until such time as an adequate decision is taken by the competentauthority of the home Member State or the credit servicer takes steps to remedy the
infringement.

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ENTitle III
Credit purchasers

Article 15
Right to information regarding a creditor’s rights under a non-performing credit agreement
or the non-performing credit agreement itself
1.

Member States shall ensure that a credit institution provides a prospective credit purchaser
with necessary information regarding a creditor’s rights under a non-performing credit
agreement, or the non-performing credit agreement itself, and, if applicable, the collateral,so as to enable the prospective credit purchaser to conduct its own assessment of the valueof the creditor’s rights under the non-performing credit agreement, or of the
non-performing credit agreement itself, and the likelihood of recovery of the value of thatagreement prior to entering into a contract for the transfer of that creditor’s rights under the
non-performing credit agreement, or of the non-performing credit agreement itself, while
ensuring the protection of information made available by the credit institution and of theconfidentiality of business data.

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2.

On a biannual basis, Member States shall require credit institutions that transfer to a credit
purchaser a creditor’s rights under a non-performing credit agreement, or the
non-performing credit agreement itself, to inform the competent authorities of the host
Member State designated in accordance with Article 21(3) of this Directive, and thecompetent authorities referred to in Article 4(5) of Directive 2013/36/EU of theEuropean Parliament and of the Council1, of at least the following:(a)the legal entity identifier (LEI) of the credit purchaser or, where applicable, of its
representative designated in accordance with Article 19, or where such identifier
does not exist, of:(i)

the identity of the credit purchaser or of the members of the credit purchaser’s
management or administrative organ and the persons who hold qualifying
holdings in the credit purchaser within the meaning of Article 4(1), point (36),of Regulation (EU) No 575/2013; and(ii)

the address of the credit purchaser or, where applicable, its representative
designated in accordance with Article 19;(b)

the aggregate outstanding balance of the creditor’s rights under the non-performing
credit agreements or of the non-performing credit agreements transferred;1

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 onaccess to the activity of credit institutions and the prudential supervision of credit
institutions, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and2006/49/EC (OJ L 176, 27.6.2013, p. 338).

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(c)

the number and size of the creditor’s rights under the non-performing credit
agreements or of the non-performing credit agreements transferred;(d)whether the transfer includes the creditor’s rights under the non-performing credit
agreements, or the non-performing credit agreements themselves, concluded with
consumers and the types of assets securing the non-performing credit agreements,
when applicable.

3.

The competent authorities referred to in paragraph 2 may require credit institutions toprovide the information referred to in that paragraph on a quarterly basis whenever they
deem necessary, including in order to better monitor a high number of transfers that mightoccur during a crisis period.

4.

Member States shall ensure that the competent authorities of the host Member State
communicate without delay the information referred to in paragraphs 2 and 3, and anyother information that they might consider to be necessary for carrying out their functions
and duties according to this Directive, to the competent authorities of the home
Member State of the credit purchaser.

5.

Paragraphs 1 to 4 shall be applied in accordance with Regulations (EU) 2016/679 and(EU) 2018/1725.

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Article 16
Implementing technical standards for data templates
1.

The EBA shall develop draft implementing technical standards to specify the templates tobe used by credit institutions for the provision of information referred to in Article 15(1),in order to provide detailed information on their credit exposures in the banking book tocredit purchasers for the analysis, financial due diligence and valuation of a creditor’srights under a non-performing credit agreement, or of the non-performing credit agreement
itself.

2.

The EBA shall specify in the draft implementing technical standards referred to inparagraph 1 of this Article the data fields, including which data fields are mandatory, andthe data treatment for confidential information as set out in Article 15(1).

3.

The draft implementing technical standards shall be proportionate to the nature and size ofcredits and credit portfolios.

4.

When preparing the draft implementing technical standards referred to in paragraph 1, the
EBA shall take into consideration all of the following:(a)existing market practices in data sharing between buyers and sellers;(b)the feedback received from users of their experience of using existing EBA
non-performing loans transaction templates;(c)existing similar requirements at Member State level;

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(d)

the importance of minimising processing costs for credit institutions and credit
purchasers.

5.

The EBA shall submit the draft implementing technical standards referred to inparagraph 1 to the Commission by … [nine months after the date of the entry into force of
this Directive].

6.

Power is conferred on the Commission to adopt the implementing technical standards
referred to in paragraph 1, in accordance with Article 15 of Regulation (EU)No 1093/2010.

7.

The data templates shall be used for transactions relating to credits issued on orafter 1 July 2018 that become non-performing after... [the date of entry into force of thisDirective]. For credits that originate between 1 July 2018 and the date of entry into force of
the implementing technical standards referred to in paragraph 1, credit institutions shallcomplete the data template with the information already available to them.

8.

Member States shall ensure that credit institutions also apply the implementing technicalstandards referred to in paragraph 6 to the transfer of a creditor’s rights under anon-performing credit agreement, or of the non-performing credit agreement itself, to othercredit institutions. The data templates shall be used by credit institutions for the provisionof information between credit institutions in cases where there is only a transfer of acreditor’s rights under a non-performing credit agreement, or of the non-performing credit
agreement itself.

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Article 17
Obligations of credit purchasers
1.

Member States shall ensure that:(a)a credit purchaser domiciled in the Union, or that has its registered office or, if under
its national law it has no registered office, its head office in the Union appoints anentity referred to in Article 2(5), point (a)(i) or (iii), or a credit servicer, to perform
credit servicing activities in respect of a creditor’s rights under a non-performing
credit agreement, or of the non-performing credit agreement itself, concluded
with consumers;(b)where a credit purchaser is not domiciled in the Union, or does not have its registeredoffice or, if under its national law it has no registered office, its head office in theUnion, its representative designated in accordance with Article 19(1) appoints anentity referred to in Article 2(5), point (a)(i) or (iii), or a credit servicer, except incases where the representative is itself an entity referred to in Article 2(5), point(a)(i) or (iii), or a credit servicer, to perform credit servicing activities in respect of acreditor’s rights under a non-performing credit agreement, or of the non-performing
credit agreement itself, concluded with:(i)natural persons, including consumers and independent workers;

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(ii)

micro, small and medium-sized enterprises (SMEs), as defined in Article 2 of
the Annex to Commission Recommendation 2003/361/EC1.

Host Member States may extend the requirement provided for in the first subparagraph toother credit agreements.
2.

Member States shall ensure that a credit purchaser is not subject to any additional
requirements for the purchase of a creditor’s rights under a non-performing credit
agreement, or of the non-performing credit agreement itself, other than as provided for by
the national provisions transposing this Directive, or by provisions of applicable consumer
protection law, contract law, civil law or criminal law. Member States shall ensure that
relevant Union and national law concerning in particular the enforcement of contracts,
consumer protection, borrowers’ rights, credit origination, bank secrecy rules and criminal
law continues to apply to the credit purchaser upon the transfer of the creditor’s rights
under the credit agreement, or of the credit agreement itself, to the credit purchaser. The
level of protection provided under Union and national law to consumers and otherborrowers, as well as insolvency rules, shall not be affected by the transfer of the creditor’srights under the credit agreement, or of the credit agreement itself, to the credit purchaser,
without prejudice to national and international rules on promissory notes and billsof exchange.

1

Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of
micro, small and medium-sized enterprises (OJ L 124, 20.5.2003, p. 36).

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3.

This Directive is without prejudice to national powers regarding credit registers, including
the power to require information from credit purchasers regarding a creditor’s rights undera credit agreement, or the credit agreement itself, and its performance.

4.

Member States may allow credit purchasers to engage natural persons to service the credit
agreements that they have acquired. Those natural persons shall be subject to a national
regulation and supervision regime and shall not benefit from the freedom provided for inthis Directive to perform credit servicing activities in another Member State.

5.

Member States shall ensure that the appointed credit servicer, or the entity referred to in
Article 2(5), point (a)(i) or (iii), complies, on behalf of the credit purchaser, with the
obligations imposed on the credit purchaser pursuant to paragraph 2 of this Article andArticles 18 and 20. In cases where no credit servicer or entity referred to in Article 2(5),point (a)(i) or (iii) is appointed, the credit purchaser or its representative shall remainsubject to those obligations.
Member States may require that the appointed credit servicer, or the entity referred to in
Article 2(5), point (a)(i) or (iii), complies, on behalf of the credit purchaser, with the
obligations imposed on the credit purchaser in accordance with national law including in
relation to paragraph 3 of this Article.

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Article 18
Use of credit servicers or other entities
1.

Where the credit purchaser or, where applicable, its representative designated inaccordance with Article 19 appoints an entity referred to in Article 2(5), point (a)(i) or (iii),
or a credit servicer, to perform credit servicing activities in relation to the transferredcreditor’s rights under a non-performing credit agreement, or the non-performing credit
agreement itself, Member States shall require that credit purchaser or its representative to
inform the competent authorities of its home Member State of the identity and address ofthe entity referred to in Article 2(5), point (a)(i) or (iii), or of the credit servicer, at thelatest on the date on which the credit servicing activities start.

2.

Where the credit purchaser or, where applicable, its representative designated inaccordance with Article 19 appoints an entity other than the one notified under paragraph 1of this Article, it shall notify the competent authorities of its home Member State thereof at
the latest on the date of that change and shall indicate the identity and address of the newentity that it has appointed to perform credit servicing activities in relation to thetransferred creditor’s rights under a non-performing credit agreement or the
non-performing credit agreement itself.

3.

Member States shall require the competent authorities of the home Member State of thecredit purchaser to transmit without undue delay to the competent authorities of the host
Member State, to the competent authorities of the Member State in which the credit was
granted, and to the competent authorities of the home Member State of the new credit
servicer, the information received in accordance with paragraphs 1 and 2.

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Article 19
Representative of a third-country credit purchaser
1.

Member States shall provide that where a transfer of a creditor’s rights under anon-performing credit agreement, or of the non-performing credit agreement itself, isconcluded, a credit purchaser that is not domiciled in the Union, or that does not have its
registered office or, if under its national law it has no registered office, its head office inthe Union designates in writing a representative that is domiciled in the Union or that does
have its registered office or, if under its national law it has no registered office, its head
office in the Union.

2.

The representative referred to in paragraph 1 shall be addressed in addition to, or insteadof, the credit purchaser by competent authorities on all issues related to the ongoingcompliance with this Directive and be fully responsible for compliance with the obligations
imposed on the credit purchaser under the national provisions transposing this Directive.

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Article 20
Transfer of a creditor’s rights under a non-performing credit agreement,
or of the non-performing credit agreement itself, by a credit purchaserand communication to the competent authorities
1.

Member States shall require a credit purchaser or, where applicable, its representative
designated in accordance with Article 19, that transfers a creditor’s rights under anon-performing credit agreement, or the non-performing credit agreement itself, to informthe competent authorities of its home Member State on a biannual basis of the legal entity
identifier (LEI) of the new credit purchaser and, where applicable, of its representative
designated in accordance with Article 19 or, where such identifier does not exist, of:(a)the identity of the new credit purchaser or, where applicable, its representative
designated in accordance with Article 19, or of the members of the new credit
purchaser’s or its representative’s management or administrative organ and thepersons who hold qualifying holdings in the new credit purchaser or its
representative within the meaning of Article 4(1), point (36), of Regulation (EU)No 575/2013; and(b)the address of the new credit purchaser or, where applicable, of its representative
designated in accordance with Article 19.

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Additionally, the credit purchaser or its representative shall inform the competentauthorities of its home Member State of at least the following:(a)the aggregate outstanding balance of the creditor’s rights under the non-performing
credit agreements, or of the non-performing credit agreements transferred;(b)

the number and size of the creditor’s rights under the non-performing credit
agreements or of the non-performing credit agreements transferred;(c)whether the transfer includes a creditor’s rights under a non-performing credit
agreement, or a non-performing credit agreement itself, concluded with consumers
and the types of assets securing the non-performing credit agreement, whenapplicable.

2.

The competent authorities referred to in paragraph 1 may require credit purchasers or,where applicable, their representatives designated in accordance with Article 19, to provide
the information referred to in that paragraph on a quarterly basis whenever thosecompetent authorities deem necessary, including in order to better monitor a high numberof transfers that might occur during a crisis period.

3.

Member States shall ensure that the competent authorities referred to in paragraphs 1 and 2transmit without undue delay the information received in accordance with those paragraphs
to the competent authorities of the host Member State and to the competent authorities of
the home Member State of the new credit purchaser.

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Title IV
Supervision

Article 21
Supervision by competent authorities
1.

Member States shall ensure that credit servicers and, where applicable, credit service
providers to whom credit servicing activities have been outsourced in accordance with
Article 12, comply with the national provisions transposing this Directive on an ongoingbasis and shall ensure that those activities are subject to adequate supervision by thecompetent authorities of the home Member State in order to assess such compliance.

2.

The home Member State of a credit purchaser or, where applicable, its representative
designated in accordance with Article 19, shall ensure that the competent authorities
referred to in paragraph 1 of this Article are responsible for the supervision of theobligations set out in Article 10 and in Articles 17 to 20 in respect of the credit purchaseror, where applicable its representative designated in accordance to Article 19.

3.

Member States shall designate the competent authorities responsible for carrying out thefunctions and duties under the national provisions transposing this Directive.

4.

Where Member States designate more than one competent authority pursuant toparagraph 3, they shall determine their respective tasks and designate one of them to be asingle point of entry for all necessary exchanges and interactions with competentauthorities of home or host Member States.

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5.

Member States shall ensure that appropriate measures are in place to enable the competentauthorities designated pursuant to paragraph 3 of this Article to obtain from credit
purchasers or their representatives designated in accordance with Article 19, credit
servicers, credit service providers to whom a credit servicer outsources credit servicing
activities under Article 12, borrowers and any other persons or public authority, theinformation necessary to carry out the following:(a)assess ongoing compliance with the requirements laid down in the national
provisions transposing this Directive;(b)

investigate possible infringements of those requirements;(c)

impose administrative penalties and remedial measures in accordance with thenational provisions transposing Article 23.

6.

Member States shall ensure that the competent authorities designated pursuant toparagraph 3 have the expertise, resources, operational capacity and powers necessary forthe exercise of their functions and duties laid down in this Directive.

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Article 22
Supervisory role and powers of competent authorities
1.

Member States shall ensure that the competent authorities of the home Member State
designated pursuant to Article 21(3) are given all supervisory, investigatory andsanctioning powers, necessary for the exercise of their functions and duties laid down inthis Directive, including at least the following:(a)the power to grant or refuse an authorisation pursuant to Articles 5 and 6;(b)

the power to withdraw an authorisation pursuant to Article 8;(c)the power to prohibit any of the credit servicing activities;(d)the power to conduct on-site and off-site inspections;(e)the power to impose administrative penalties and remedial measures in accordancewith the national provisions transposing Article 23;(f)

the power to review outsourcing agreements concluded between credit servicers andcredit service providers in accordance with Article 12(1);(g)

the power to require credit servicers to remove members of their management oradministrative organ when they fail to comply with the requirements set out in
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(h)

the power to require credit servicers to modify or update their internal governancearrangements and internal control mechanisms in order to effectively ensure respect
for borrowers’ rights in accordance with the laws governing the credit agreement;(i)the power to require credit servicers to modify or update their policies adopted toensure the fair and diligent treatment of borrowers, and the recording and handling ofcomplaints from borrowers;(j)the power to request further information pertaining to the transfer of a creditor’srights under the non-performing credit agreement, or of the non-performing credit
agreement itself.

2.

Member States shall ensure that the competent authorities of the host Member State
designated pursuant to Article 21(3) and of the Member State where the credit was granted,
when different from the host and the home Member States, are given all necessary powers
for the exercise of their functions and duties laid down in this Directive.

3.

Member States shall ensure that the competent authorities of the home Member Stateevaluate, by applying a risk-based approach, the implementation by a credit servicer of therequirements set out in Article 5(1), points (e) to (h).

4.

Member States shall determine the extent of the evaluation referred to in paragraph 3,
having regard to the size, nature, scale and complexity of the activities of the credit
servicer concerned.

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5.

The competent authorities of the home Member State shall inform the competentauthorities of the host Member State, or of the Member State where the credit was granted,
when different from the host and the home Member States, of the results of the evaluationreferred to in paragraph 3 upon request of one of those competent authorities, or where thecompetent authorities of the home Member State consider it appropriate. The details of any
administrative penalties or remedial measures imposed shall be transmitted by thecompetent authorities of the home Member State to the competent authorities of the host
Member State and, where appropriate, of the Member State where the credit was granted,
when different from the host and the home Member States.

6.

Member States shall ensure that when carrying out the evaluation referred to inparagraph 3, the competent authorities of the home and of the host Member States, and of
the Member State where the credit was granted, when different from the host and the home
Member States, exchange all information necessary to enable them to carry out theirrespective functions and duties laid down in this Directive.

7.

Member States shall ensure that the competent authorities of the home Member State areable to require a credit servicer, credit service provider or credit purchaser or its
representative designated in accordance with Article 19 that does not meet therequirements of the national provisions transposing this Directive to take, at an early stage,
all necessary actions or steps in order to comply with those provisions.

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Article 23
Administrative penalties and remedial measures
1.

Without prejudice to the right of Member States to lay down criminal penalties,
Member States shall lay down rules establishing appropriate administrative penalties andremedial measures applicable in at least the following situations:(a)a credit servicer fails to comply with the requirement set out in the national
provisions transposing Article 11 or enters into an outsourcing agreement infringing
the national provisions transposing Article 12 or the credit service provider to whom
the credit servicing activities were outsourced commits a serious infringement of theapplicable legal provisions, including the national provisions transposing thisDirective;(b)

a credit servicer’s governance arrangements and internal control mechanisms as set
out in Article 5(1), point (e) fail to ensure respect for borrower rights and compliancewith personal data protection rules;(c)a credit servicer’s policy is inadequate for the proper treatment of borrowers as set
out in Article 5(1), point (f);(d)

a credit servicer’s internal procedures as set out in Article 5(1), point (g) fail toprovide for the recording and handling of complaints from borrowers according tothe obligations set out in the national provisions transposing this Directive;

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(e)

a credit purchaser or, where applicable, its representative designated in accordancewith Article 19 fails to communicate the information provided for by national
provisions transposing Articles 18 and 20;(f)a credit purchaser or, where applicable, its representative designated in accordancewith Article 19 fails to comply with the requirement of the national provisions
transposing Article 17;(g)a credit purchaser fails to comply with the requirement of the national provisions
transposing Article 19;(h)a credit institution fails to communicate the information set out in the national
provisions transposing Article 15;(i)a credit servicer allows one or more persons not complying with the requirements set
out in Article 5(1), point (b) to become or remain a member of its management oradministrative organ;(j)a credit servicer fails to comply with the requirements set out in the national
provisions transposing Article 24;(k)a credit purchaser or, where applicable, credit servicers or any entity mentioned
under Article 2(5), point (a)(i) or (iii), fails to comply with national provisions
transposing Article 10;

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(l)

a credit servicer receives and holds funds from borrowers when this is not permitted
in a Member State in accordance with Article 6(1), point (b);(m) a credit servicer fails to comply with the requirements set out in the national
provisions transposing Article 6(2).
2.

The administrative penalties and remedial measures referred to in paragraph 1 shall beeffective, proportionate and dissuasive and shall include at least the following:(a)a withdrawal of an authorisation to carry out activities as a credit servicer;(b)an order requiring the credit servicer or credit purchaser or, where applicable, its
representative designated in accordance with Article 19 to remedy the infringement,
and to cease the conduct and to desist from a repetition of that conduct;(c)3.

administrative pecuniary penalties.

Member States shall ensure that administrative penalties and remedial measures are
effectively implemented.

4.

Member States shall ensure that when determining the type of administrative penalties orremedial measures and the amount of those administrative pecuniary penalties thatcompetent authorities take into account relevant circumstances, including the following:(a)the gravity and the duration of the infringement;

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(b)

the degree of responsibility of the credit servicer or credit purchaser or, whereapplicable, its representative designated in accordance with Article 19, responsible
for the infringement;(c)the financial strength of the credit servicer or credit purchaser responsible for the
infringement, including by reference to the total turnover of a legal person or theannual income of a natural person;(d)the importance of profits gained or losses avoided because of the infringement by thecredit servicer or credit purchaser or, where applicable, its representative designatedin accordance with Article 19, responsible for the infringement, insofar as those
profits or losses can be determined;(e)the losses caused to third parties by the infringement, insofar as those losses can be
determined;(f)the level of cooperation by the credit servicer or credit purchaser responsible for the
infringement with the competent authorities;(g)

previous infringements by the credit servicer or credit purchaser or, whereapplicable, its representative designated in accordance with Article 19, responsible
for the infringement;(h)any actual or potential systemic consequences of the infringement.

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5.

Member States shall ensure that competent authorities can apply the administrative
penalties and remedial measures set out in paragraph 2 to members of the management oradministrative organ, and to other individuals who under national law are responsible forthe infringement.

6.

Member States shall ensure that before taking any decision imposing the administrative
penalties or remedial measures set out in paragraph 2 of this Article, the competentauthorities give the concerned credit servicer, credit purchaser or where applicable, its
representative designated in accordance with Article 19, the opportunity to be heard.

7.

Member States shall ensure that any decision imposing the administrative penalties orremedial measures set out in paragraph 2 is properly reasoned and is subject to the rightof appeal.

8.

Member States may decide not to lay down rules for administrative penalties forinfringements that are subject to criminal penalties under their national law. In that case,
Member States shall communicate to the Commission the relevant criminal law provisions.

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Title V
Safeguards and duty to cooperate

Article 24
Complaints
1.

Member States shall ensure that credit servicers establish and maintain effective andtransparent procedures for the handling of complaints from borrowers.

2.

Member States shall ensure that the treatment by credit servicers of complaints fromborrowers is free of charge and that credit servicers record the complaints and the measurestaken to address them.

3.

Member States shall ensure that the competent authorities establish and publish aprocedure for the handling of complaints from borrowers concerning credit purchasers,
credit servicers and credit service providers, and shall ensure that they are treated promptly
when received.

Article 25
Personal data protection
The processing of personal data for the purposes of this Directive shall be carried out in accordancewith Regulations (EU) 2016/679 and (EU) 2018/1725.

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Article 26
Cooperation between competent authorities
1.

Member States shall ensure that the competent authorities referred to in Articles 8, 13, 14,
15, 18, 20 and 22 cooperate with each other whenever necessary for the purpose ofcarrying out their functions and duties or of exercising their powers under the national
provisions transposing this Directive. Those competent authorities shall also coordinate
their actions in order to avoid possible duplication and overlap when applying supervisory
powers and administrative penalties and remedial measures to cross-border cases.

2.

Member States shall ensure that competent authorities, on request and without undue
delay, provide each other with the information required for the purpose of carrying out
their functions and duties under the national provisions transposing this Directive.

3.

Member States shall ensure that competent authorities receiving confidential informationin the exercise of their functions and duties under this Directive use that information onlyin the course of their functions and duties under the national provisions transposing thisDirective. The exchange of information between competent authorities shall be subject tothe obligation of professional secrecy referred to in Article 76 of Directive 2014/65/EU of
the European Parliament and of the Council1.

1Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on
markets in financial instruments and amending Directive 2002/92/EC and Directive
2011/61/EU (OJ L 173, 12.6.2014, p. 349).

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4.

Member States shall provide that all persons working, or who have worked, for thecompetent authorities and auditors or experts acting on behalf of the competent authorities
are bound by the obligation of professional secrecy.

5.

Member States shall take the necessary administrative and organisational measures tofacilitate the cooperation provided for in this Article.

6.

The EBA shall facilitate the exchange of information between competent authorities in theMember States and promote their cooperation.

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Title VI
Amendments

Article 27
Amendments to Directive 2008/48/EC
Directive 2008/48/EC is amended as follows:(1)

the following article is inserted:‘Article 11a
Information regarding the modification of the terms and conditions of a credit agreement
Without prejudice to other obligations provided for in this Directive, Member States shallensure that prior to modifying the terms and conditions of the credit agreement, thecreditor communicates the following information to the consumer:(a)a clear description of the proposed changes and, where applicable, of the need for
consumer consent or of the changes introduced by operation of law;(b)

the timescale for the implementation of the changes referred to in point (a);(c)

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(d)

the time period available for lodging any such complaint;(e)the name and address of the competent authority to which the consumer can submitthat complaint.’;(2)

the following article is inserted:‘Article 16a
Arrears and enforcement
1.

Member States shall require creditors to have adequate policies and procedures sothat they make efforts to exercise, where appropriate, reasonable forbearance before
enforcement proceedings are initiated. Such forbearance measures shall take into
account, among other elements, the consumer’s circumstances and may consist of,among other possibilities:(a)a total or partial refinancing of a credit agreement;(b)a modification of the existing terms and conditions of a credit agreement,
which may include among others:(i)extending the term of the credit agreement;(ii)changing the type of credit agreement;(iii) deferring payment of all or part of the instalment repayment for a period;

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(iv) changing the interest rate;(v)

offering a payment holiday;(vi) partial repayments;(vii) currency conversions;(viii) partial forgiveness and debt consolidation.
2.

The list of potential forbearance measures set out in point (b) of paragraph 1 iswithout prejudice to rules set out in national law and does not require Member States
to provide for all of those measures in their national law.

3.

Member States may require that, where the creditor is permitted to define and impose
charges on the consumer arising from the default, those charges are no greater than isnecessary to compensate the creditor for costs it has incurred as a result of thedefault.

4.

Member States may allow creditors to impose additional charges on the consumer inthe event of default. In that case, Member States shall place a cap on those charges.’;

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(3)

Article 22(1) is replaced by the following:‘1.

Insofar as this Directive contains harmonised provisions, Member States may not
maintain or introduce in their national law provisions diverging from those laid downin this Directive. However, Article 16a(3) and (4) shall not preclude Member Statesfrom maintaining or introducing more stringent provisions in order to protect
consumers.’.

Article 28
Amendments to Directive 2014/17/EU
Directive 2014/17/EU is amended as follows:(1)

the following article is inserted:‘Article 27a
Information regarding the modification of the terms and conditions of a credit agreement
Without prejudice to other obligations provided for in this Directive, Member States shallensure that, prior to modifying the terms and conditions of the credit agreement, thecreditor communicates the following information to the consumer:(a)a clear description of the proposed changes and, where applicable, of the need for
consumer consent or of the changes introduced by operation of law;

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(b)

the timescale for the implementation of the changes referred to in point (a);(c)

the means for complaint available to the consumer regarding the changes referred toin point (a);(d)

the time period available for lodging any such complaint;(e)the name and address of the competent authority to which the consumer can submitthat complaint.’;(2)

Article 28 is amended as follows:(a)paragraph 1 is replaced by the following:‘1.

Member States shall require creditors to have adequate policies and procedures
so that they make efforts to exercise, where appropriate, reasonable
forbearance before foreclosure proceedings are initiated. Such forbearance
measures shall take into account, among other elements, the consumer’s
circumstances and may consist of, among other possibilities:(a)a total or partial refinancing of a credit agreement;(b)a modification of the existing terms and conditions of a credit agreement,
which may include among others:(i)extending the term of the credit agreement;

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(ii)

changing the type of credit agreement;(iii) deferring payment of all or part of the instalment repayment for aperiod;(iv) changing the interest rate;(v)

offering a payment holiday;(vi) partial repayments;(vii) currency conversions;(viii) partial forgiveness and debt consolidation.’;(b)

the following paragraph is inserted:‘1a. The list of potential forbearance measures set out in point (b) of paragraph 1 iswithout prejudice to rules set out in national law and does not require
Member States to provide for all of those measures in their national law.’;

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(3)

the following article is inserted:‘Article 28a
Assignment of the creditor's rights or of the credit agreement itself
1.

In the event of an assignment to a third party of the creditor’s rights under a credit
agreement, or of the credit agreement itself, the consumer shall be entitled to plead
against the assignee any defence which was available to the consumer as against theoriginal creditor, including set-off where the latter is permitted in the Member State
concerned.

2.

The consumer shall be informed of an assignment referred to in paragraph 1, except
where the original creditor, by agreement with the assignee, continues to service thecredit vis-à-vis the consumer.’.

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Title VII
Final provisions

Article 29
Committee
1.

The Commission shall be assisted by a committee. That committee shall be a committee
within the meaning of Regulation (EU) No 182/2011 of the European Parliament and of
the Council1.

2.

Where reference is made to this paragraph, Article 4 of Regulation (EU) No 182/2011
shall apply.

1

Regulation (EU) No 182/2011 of the European Parliament and of the Council of
16 February 2011 laying down the rules and general principles concerning mechanisms forcontrol by Member States of the Commission’s exercise of implementing powers (OJ L 55,
28.2.2011, p. 13).

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Article 30
Evaluation
1.

By … [five years after the date of entry into force of this Directive], the Commission shallcarry out an evaluation of this Directive and present a report on the main findings to theEuropean Parliament, the Council and the European Economic and Social Committee. The
evaluation shall consist of at least the following:(a)the number of authorised credit servicers in the Union and the number of credit
servicers providing their services in a host Member State;(b)the number of creditors’ rights under non-performing credit agreements or of
non-performing credit agreements purchased from credit institutions by credit
purchasers domiciled or having their registered office or, if under their national law
they have no registered office, their head office, in the same Member State as thecredit institution, or in a different Member State than the credit institution, or outsideof the Union;(c)an assessment of the existing money laundering and terrorist financing risk
associated with the activities performed by credit servicers and credit purchasers;(d)

an assessment of the cooperation between competent authorities under Article 26.

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2.

Where the evaluation identifies significant problems with the functioning of this Directive,
the report shall outline how the Commission intends to address the identified problems,
including steps and timings of the potential revision.

Article 31
Review clause
Without prejudice to the legislative prerogatives of the European Parliament and the Council, by …
[24 months after the date of entry into force of this Directive], the Commission shall submit to theEuropean Parliament and to the Council a report on:(a)the adequacy of the regulatory framework regarding a potential introduction of caps on
charges arising from the event of default applicable to credit agreements concluded with:(i)natural persons for purposes related to the trade, business or profession of thosenatural persons;(ii)

SMEs, as defined in Article 2 of the Annex to Recommendation 2003/361/EC;(iii) any borrower, provided that the credit is guaranteed by a natural person or is secured
by assets or property belonging to that natural person;

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(b)

relevant aspects, including potential forbearance measures, of credit agreements
concluded with:(i)natural persons for purposes related to the trade, business or profession of thosenatural persons;(ii)

SMEs, as defined in Article 2 of the Annex to Recommendation 2003/361/EC;(iii) any borrower, provided that the credit is guaranteed by a natural person or is secured
by assets or property belonging to that natural person;(c)the need for, and feasibility of, developing implementing or regulatory technical standards
or other appropriate means to introduce common reporting formats for communications toborrowers under Article 10(2) and on forbearance measures.

Where appropriate, the report referred to in the first paragraph shall be accompanied by alegislative proposal.

Article 32
Transposition
1.

Member States shall adopt and publish, by … [24 months after the date of entry into forceof this Directive], the laws, regulations and administrative provisions necessary to comply
with this Directive. They shall immediately communicate the text of those measures to
the Commission.

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2.

They shall apply the measures referred to in paragraph 1 from … [24 months after the dateof entry into force of this Directive plus one day].
By way of derogation from the first subparagraph, entities already carrying out inaccordance with national law credit servicing activities on … [24 months after the date ofentry into force of this Directive plus one day] shall be allowed to continue carrying out
those credit servicing activities in their home Member State until... [30 months after thedate of entry into force of this Directive] or until the date on which they obtain an
authorisation in accordance with this Directive, whichever is the earlier.
Member States that already have in place regimes that are equivalent to, or stricter than,those established in this Directive for credit servicing activities may allow entities alreadycarrying out credit servicing activities under those regimes on … [24 months after the dateof entry into force of this Directive plus one day] to be automatically recognised as
authorised credit servicers by the national provisions transposing this Directive.

3.

When Member States adopt the measures referred to in paragraph 1, they shall contain areference to this Directive or be accompanied by such a reference on the occasion of theirofficial publication. Member States shall determine how such reference is to be made.

4.

Member States shall communicate to the Commission the text of the main provisions ofnational law which they adopt in the field covered by this Directive.

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Article 33
Entry into force
This Directive shall enter into force on the twentieth day following that of its publication in the
Official Journal of the European Union.

Article 34
Addressees
This Directive is addressed to the Member States.
Done at …,

For the European Parliament

For the Council

The President

The President

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