EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 9 December 2015  
on consumer credit 
(CON/2015/ 54) 
 
Introduction and legal basis  
On 6 October  2015 the European Central Bank (ECB) received a request from the Minister of Finance of 
the Czech Republic for an opinion on a draft law on consumer credit (hereinafter the ‘draft law’).  
The ECB’s competence to deliver an opinion is based on Articles 127( 4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third indent of Article 2(1) of Council Decision 98/415/EC1, as 
the draft law relates to a national central bank. In accordance with the first sentence of Article 17.5 of the 
Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.  
 
1.  Purpose of the draft law  
1.1 The purpose of the draft law is to transpose into Czech law Directive 2014/17/EU  of the European 
Parliament and of the Council2 and parts of Directive 2008/48/EC of the European Parliament and 
of the Council3, whilst also building on certain relevant EU provisions in Commission Delegated 
Regulation (EU) No 1125/20144. The draft law also seeks to regulate the activities of authoris ed 
providers and intermediaries of consumer credit, including their activities abroad, and the rights and 
obligations of parties in the provision and intermediation of consumer credit.   
1.2 The principal provisions of the draft law:  
(1)  set out which types of authorised entity may provide and intermediate consumer credits5 as 
part of its business activity in the Czech Republic, subject to the provisions of the draft law, 
with such entities including also non- banks6 (hereinafter ‘consumer credit providers and 
                                                 
1  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
2  Directive 2014/17/EU  of the European Parliament and 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).  
3  Directive 2008/48/EC of the European Parliament and 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).  The draft law w ill overhaul 
Law 145/2010 Coll. on consumer credit , which implement s Directive 2008/48/EC , 
4
  Commission Delegated Regulation (EU) No 1125/2014 of 19 September 2014 supplementing Directive 2014/17/EU 
of the European Parliament and of the Council with regard to regulatory technical standards on the minimum 
monetary amount of the professional indemnity insurance or comparable guarantee to be held by credit 
intermediaries (OJ L 305, 24.10.2014, p. 1).  
5  As defined in Article 2 and subject to the exemptions set out in Article 4 of the draft law.   
6  See Articl e 7 of the draft law. The addition of non- banks to the list of enti ties which may be authorised b ČNB  to 
provide or intermediate consumer credit will require a small amendment to the Act on Česká národní banka No. 
6/1993 Coll., as amended.  
ECB-PUBLIC  
2 intermediaries’), and the activities that come under the provision and intermediation of 
consumer credit7;  
(2)  place consumer credit providers and intermediaries  under the oversight and supervision of 
Česká národní banka (‘ČNB’)8; and  
(3)  overhaul the current legal framework regulating such entities and the provision of such 
services and ČNB’s supervisory and regulatory powers with respect to such entities, 
including the conditions for their authorisation, the maintenance by ČNB of a public register 
of such entities, and ČNB’s  power to charge fees for their authorisation and for renewals of 
authorisation, so as to finance ČNB’s costs related to their supervision9.  
1.3  The ECB understands that to date  non-banking credit providers and intermediaries have been 
licensed by trade offices ( “živnostenský úřad”) , that they have been only lightly regulated and that 
they have been supervised by the Czech Trade Inspect ion Authority, which falls  under the 
jurisdiction of the Ministry of Industry and Trade10. 
1.4 The ECB understands that there is a disagreement  between the Ministry of Finance and Č NB 
insofar as  ČNB is not willing  to assum e this new supervisory task.  The ECB trusts that this 
disagreement  will be resolved at national level with due regard to the principle of central bank 
independence.  
 
2. General observations  
2.1 The ECB understands that the draft law will bring consumer credit providers and intermediaries  
under the supervision of ČNB . The ECB takes note of the intention of the legislator to achieve a 
consistently high level of supervision also for non- bank consumer credit providers.  However, t he 
ECB also notes that  to date non-banking consumer credits  have had negative social impacts in the 
Czech Republic .  
2.2 The draft law expands ČNB’s powers to supervise also non-bank  consumer credit  providers and 
intermediaries, thus broadening and extending ČNB’s current responsibilities for the supervision of 
the same activities when undertaken by licensed credit institutions. The ECB underlines that, in the 
context of a proposed conferral of new tasks on an ESCB member, it is necessary to assess such 
conferral against the prohibition of monetary financing under Article 123 of the Treaty. The ECB 
has developed the gu idance  set out in paragraphs 2.2.1 to 2.2.3 of this opinion, in the form of 
                                                 
7  See Article 3(1)(a) and (b) of the draft law.  
8   See Part X (Oversight) of the draft law. Currently ČNB  supervises consumer credit only if provided or intermediated 
by entities which it supervises (i.e. credit institutions, foreign bank branches, electronic money ins titutions, savings 
banks and credit cooperatives).  
9  See amended item 65, point 9 of Annex II to the accompanying draft law amending Law No.634/2004 on 
administrative fees. As regards ČNB’s  statutory power to set administrative fees for authorising and renewing of 
authorisation of consumer credit providers and of intermediaries, see Article 12(2) and Articles 20  and 31 of the draft 
law respectively.  
10  Under the current Law 145/2010 Coll. on consumer credit, the Czech Trade Inspect ion Authority is responsible for 
supervising the provision and intermediation of consumer credit by non- banks (with Trade Licensing Offices being 
responsible for issuing trade licences to the entities concerned), unless, as part of these activities, the entities  offer 
payment services, e.g. issue of credit cards, in which case they are licensed as payment institutions and supervised by ČNB .
 
ECB-PUBLIC  
3 general and specific considerations, on the basis of which it may decide whether a new task 
conferred on an ESCB national central bank (NCB) is to be considered a central banking t ask or a 
government task for the purposes of assessing such conferral against the prohibition of monetary 
financing under Article 123 of the Treaty11. The concrete assessment of whether ČNB’s task of 
supervising consumer credit providers and intermediaries is to be considered a central banking 
task or a government task is then undertaken in paragraph 3.1 of this opinion.  
2.2.1  General considerations  
First, the systematic categorisation of tasks assigned to NCBs as central banking or government 
tasks applies to genuinely new tasks that did not exist in the past or did not form an integral part of the central banking tasks already assigned to the NCB in the past. In recognition of the different 
Member States’ legal frameworks, central banking traditions and nat ional set -ups, the tasks 
currently discharged by an NCB as central banking tasks are not reviewed and re- categorised, but 
may be reassessed if their substance is amended.  
Second, it needs to be emphasised that when Member States decide to confer new tasks on their 
NCBs , due regard must  be given to the role of the NCB as part of the ESCB or Eurosystem, as 
applicable, and to the requirement of central bank independence.  The principle of financial 
independence, which is a key aspect of the principle of central  bank independence as laid down in 
Article 130 of the Treaty , requires that the Member States may not put their NCBs in a position 
where they have insufficient financial resources to carry out their ESCB - or Eurosystem -related 
tasks , as applicable.  Accordingly, an NCB must have sufficient financial means not only to perform 
its ESCB - or Eurosystem -related tasks but also its national tasks (e.g. financing its administration 
and own operations)
12. Where an NCB considers that the allocation of a new tas k would impinge 
on its financial independence, because it would  not have sufficient means to focus primarily on its 
ESCB-  or Eurosystem -related tasks , or that the discharge of th e new task would impose a 
disproportionate burden on it, the NCB should be abl e to object  to the new task  being allocated to 
it.  
Third , central banking tasks comprise in particular those tasks that are related to the tasks listed in 
Article 127(2), (5) and (6) of the Treaty.  
Fourth, new tasks conferred on an NCB which are atypical of NCBs’ tasks, or which are clearly 
discharged on behalf of and in the exclusive interest of the government or of other public entities, 
should be considered as government tasks. In that context, a distinction should be drawn between 
NCBs’ liquidity - and solvency -related tasks. While, for the purposes of the monetary financing 
prohibition, solvency support is a government task, liquidity -related tasks, the ultimate objective of 
which are to finance the economy, are central banking tasks.  
 
  
                                                 
11  See Opinion CON/2015/22. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
12  See the ECB’s  2014 Convergence Report, p. 25.  
ECB-PUBLIC  
4 2.2.2  Specific considerations  
Banking supervision and macro- prudential tasks are central banking tasks when discharged by an 
NCB, provided they do not undermine its independence in accordance with Article 130 of the 
Treaty.  
An important criterion for qualifying a new task as a government task is the impact of the task on the institutional, financial and personal independence of the NCB. In particular, the following should be taken into account.  
First, it should be assessed whether the performance of the new task creates inadequately 
addressed conflicts of interests with existing central banking tasks, without necessarily 
complementing the existing central banking tasks. If a conflict of interest arises between existing 
and new tasks, there should be sufficient mitigation measures in place to adequately address that 
conflict. Complementarity between the new task and existing central banking tasks should not, 
however, be interpreted broadly, as this could lead to the creation of an indefinite chain of ancillary 
tasks. The as sessment of the complementarity of the new task should also take into account the 
financing of that task.  In the event of a conflict of interest between prudential supervision and 
consumer protection prudential supervisory considerations must prevail
13. 
Second, it should be assessed whether without new financial resources the performance of the 
new task places a disproportionate burden on the financial or organisational capacity of the NCB 
and may negatively impact on its capacity to properly perform existing central banking tasks.  
Third , it should be assessed whether the performance of the new task is aligned with the 
institutional set -up of the NCB, in particular as regards central bank independence and 
accountability considerations.  
Fourth, it should be as sessed whether the performance of the new task entails substantial financial 
risks.  
Fifth, it should be assessed whether the performance of the new task exposes the members of the 
NCB’s decision -making bodies to political risks that are disproportionate and could also impact on 
their personal independence and, in particular, the guarantee of the Governor’s term of office under Article  14.2 of the Statute of the European System of Central Banks and of the European Central 
Bank.  
2.2.3  Any final assessment on the qualification of a task given to an NCB as either falling within the scope of a central banking task or a government task will be guided by the objective of ensuring the 
consistent application of the prohibition of monetary financing within the Eurosys tem and the 
ESCB.  
 
                                                 
13  See paragraph 3.1 of CON/2015/21.  
ECB-PUBLIC  
5 3. Specific observations  
3.1 Conferral on ČNB of the task of supervising consumer credit providers and intermediaries  
The draft law designates ČNB as the supervisory authority for non- bank consumer credit providers 
and intermediaries, thus broadening its current functions and activities. The ECB understands that 
up to now this segment  of the financial market  has been regulated in an unsatisfactory manner . In 
the light of the guidance set out in paragraphs  2.2.1 to 2.2.3, it must be assessed whether ČNB’s 
new tasks could constitute a breach of the monetary financing prohibition.  
3.2 Principle of financial independence   
The principle of financial independence requires NCBs to have sufficient means to carry out not 
only their ESCB -related tasks but also their national tasks, both from an operational and financial 
perspective14. In this regard the ECB notes that the draft law provides that ČNB has the power to 
require that consumer credit providers and intermediaries pay ČNB fees for authorisations and renewals of authorisations
15. The staff of such entities will need to acquire the relevant professional 
qualifications in order to be able to perform these activities . However , this will be achieved under 
the responsibility and at the cost of the supervised entity, with ČNB acting only as the accrediting body for such qualifications. This should ensure that the cost of authorising market participants for 
such activities is met by the industry. However, the c osts of carrying out supervision by ČNB might  
not be  fully covered by the fees  collected . The new task is expected to lead to increased staffing 
and operational costs for ČNB
16.  
3.3 Links to tasks listed in Article 127(5) of the Treaty  
The supervision of  consumer credit providers and intermediaries can be considered a task related 
to those referred to in Article 127(5) of the Treaty, based on the understanding that it is complementary to the supervisory tasks exercised by the NCB, particularly where, as i n this case, 
ČNB already supervises credit institutions, including their consumer credit activities, and has the 
task of ensuring the stability of the financial system . 
Moreover , point 2 of Annex 1 to Directive  2013/36/EU of the European Parliament and of the 
Council
17 lists the provision and intermediation of consumer credit as activities that are subject to 
mutual recognition.  Such activities may thus be carried out across borders by credit institutions and 
non-banks authorised and supervised by the compet ent authorities of another Member State, 
provided that such activities are covered by the relevant authorisation of the entity concerned18. 
From this perspective, it makes sense to designate ČNB as the only competent authority  in this 
area in the Czech Republic.  
                                                 
14  See ECB 2014 Convergence Report, p. 25.  
15  See footnote 9 for provisions on the administrative fees that ČNB will  charge for providers’ and intermediaries’ 
authorisations and renewals of authorisations.  
16  For example, Č NB’s branch network may face an increased work load as a result of having to deal with public 
complaints about local non- bank consumer credit providers . 
17  See Annex 1 to Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to 
the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013,  p. 338).  
18  See also Opinion CON/2015/37.  
ECB-PUBLIC  
6 3.4 Atypical tasks 
A number of Member States have conferred on their NCBs supervisory tasks related to the 
provision of consumer credit19. The ECB has generally accepted the allocation of such tasks to 
NCBs provided they do not interfere with the performance of the NCB’s ESCB -related tasks20. The 
tasks of an NCB with regard to the supervision of consumer credit providers and intermediaries can therefore, if this condition is met,  be regarded as tasks not atypical  of a central bank, particularly if, 
as in the case of ČNB,  it has a statutory responsibility for banking supervision and financial 
stability
21. It is important however that approp riate resources are available to ensure that ČNB  can 
properly perform the se functions22. 
3.5  Discharge of tasks on behalf of and in the exclusive interest of the Government or of other public 
entities  
ČNB is designated as the sole supervisory authority for consumer credit providers and 
intermediaries in its own name. However,  background documentation regarding the draft law 
indica tes that this designation is proposed by the Ministry of Finance as a reaction to a social -
economic problem associated with the indebtedness of some parts of the population in the Czech 
Republic23.  
3.6 Extent to which conflicts of interests with existing ČNB tasks are addressed and the performance of tasks is aligned with ČNB’s institutional set -up, in particular as regards central bank independence 
and accountability considerations  
As the supervisor of consumer credit providers and intermedi aries, ČNB will also be responsible 
under the draft law for applying consumer protection rules to  such entities . As the authority 
responsible for supervisi ng the financial market s, ČNB will be required to mitigate any potential 
conflict of interests between its consumer protection tasks and its banking supervision and financial stability mandates , by always taking the latter into account when imposing a sanction or 
enforcement measure in relation to a breach of an obligation in the field of financial consumer 
protection. Sufficient mitigation measures must be put in place to ensure that , in the event of a 
conflict of interest , prudential supervisory considerations will prevail
24. In this regard, given the 
complementarity of the new task of supervising c onsumer credit providers and intermediaries with 
ČNB’s existing supervisory tasks , the new task may be said to fit  into ČNB’s institutional set -up. 
There is  however  a reputational risk that , despite the proposed more stringent regulation and 
supervision of consumer credit providers and intermediaries,  ČNB could be held accountable by 
the general public for problems related to the indebtedness of society and unlawful usury.  
                                                 
19  According to the Ministry of Finance’s explanatory memorandum to the draft law, there are 7 NCBs which currently 
carry out such super visory tasks in the European Union.  
20  See, for example, paragraphs 2.1- 2.3 of Opinion CON/2006/38, paragraphs 2.1 and 2.2 of Opinion CON/2006/47, 
paragraphs 2.1- 2.5 of Opinion CON/2007/29 and paragraph 2 of Opinion CON /2009/71.  
21  Articles 2 and 44 of the Act on the Czech National Bank No 6/1993 Coll.,  as amended.  
22  See further paragraph 3.7 below  
23   See  Parliamentary Resolution no. 367/2014 as published in the Parliamentary Gazette,  Issue no. 41 and  the 
Regulatory impact assessment (RIA) for the draft law: http://www.mfcr.cz/cs/soukromy- sektor/spotrebitelsky-
uver/distribuce- uveru- pro-spotrebitele/zahajeni -mezirezortniho- pripominkoveho- r-21716  
24  See paragraph 3.1 of CON/2015/21.  
ECB-PUBLIC  
7 3.7 Extent to which the performance of tasks is proportionate to ČNB’s financial and operational 
capacity and its ability to perform its ESCB -related tasks  
As noted above, in order to remain financially independent, NCBs must have sufficient means to 
carry out not only their ESCB -related tasks but also their national tasks, both from an operational 
and financial perspective. The ECB understands that the draft law ’s regulatory impact assessment  
does not contain a precise estimate of the direct costs that ČNB is likely to incur  by also 
supervising non- bank consumer credit providers and intermediaries25. In this regard, however, the 
ECB welcomes the fact that the draft law provides that consumer credit providers  and 
intermediaries will be charged administrative fees for the issuance of authorisations to carry out such activities and for the renewal of such authorisations.  However, the ECB presumes  that these 
fees would not cover all of ČNB’s costs related to this supervision.  
The ECB also understands that this n ew task will lead to ČNB hav ing to address more punitive 
administrative cases . In accordance with Czech administrative law, the ECB understands that  
these cases are heard by two instances. Although ČNB  may recruit sufficient  staff to deal with the 
cases at  first instance,  it is only ČNB ’s seven -member  Bank Boar d that may take a final decision at 
second instance. Therefore, f rom an operational perspective , the ECB is concerned as to whether 
ČNB ’s Bank Board will have sufficient capacity to properly handle  its core central bank ing and 
ESCB- related tasks together with these new cons umer protection cases.  Furthermore, the 
workload of ČNB ’s Bank Board related to consumer cases might be disproportionate in comparison 
to its core central banking,  ESCB- related, prudential supervisory and macro- prudential  tasks.  
3.8 Extent to which the performance of tasks entails substantial financial risks  
As in the case of other State authorities performing public functions, ČNB’s potential liability for 
damages and/or costs arising from any breaches of law or improper administrat ive procedures in 
the supervision of such entities under the draft law, will be subject to the usual rules on liability for 
damage caused during the exercise of State Authority
26.  
The ECB notes  that the explanatory memorandum to the draft law considers that taking on the 
supervisory responsibility for a sector , which has for many years been only lightly regulated, may 
entail - apart from the additional  financia l burden  - reputational risks for ČNB27. The ECB also notes 
that the draft law includes powers to supervise such entities, so that if those powers are effectively 
used and enforced any reputational risks can be minimised.  
 
 
                                                 
25  See the Ministry of Finance explanatory memorandum to the draft law , and p. 65 of the Regulatory impact 
assessment (RIA) , which incl udes only a broad r ange of estimated annual  costs as provided by ČNB :    
http://www.mfcr.cz/cs/soukromy- sektor/regulace/spotrebitelsky- uver/distribuce- uveru- pro-spotrebitele/zahajeni -
mezirezortniho- pripominkoveho- r-21716.  
26  Pursuant to the Act No. 82/1998 Coll. on State liability, as amended, the State is primarily liable for damage caused 
by an unlawful decision or improper administrative action by a legal entity or person in the course of exercising public 
authority on the State’s behalf. In this case that entity would be ČNB as the competent supervisory authority. Should 
the State be held liable for any breach of ČNB’s legal obligations, the State may request it to indemnify the State but 
only for damage caused by ČNB’s culpable conduct, such as negligence and wilful misconduct.  
27  See the Ministry of Finance’s explanatory memorandum to the draft law as referred to in footnote 2 5, where th e 
possible reputational risk for ČNB is acknowledged.  
ECB-PUBLIC  
8 4.  Conclusion  
The ECB considers that there are grounds for regarding ČN B’s new task of supervising non- bank 
consumer credit providers and intermediaries as a central banking task in the sense that it can be 
regarded as complementing CNB’s existing banking supervisory functions in the area of consumer credit, 
provided it does not undermine ČNB’s independence.  As the authority responsible for supervising  the 
financial market s, ČNB  should put in place measures to mitigate any potential conflict of interests 
between its consumer protection tasks in respect of such entities  and its  existing banking supervision and 
financial stability mandates , to ensure that in the event of a conflict , the latter mandates  prevail.  
There are concerns that by proposing that ČNB perform the  new task under the draft law the authorities 
are reacting to a social -economic problem connected to the indebtedness of some parts of the population 
in the Czech Republic , which is a problem not  purely  related to financial supervisi on. There are also 
concerns  relating to the operational and reputational risks connected with vesting ČNB with supervisory 
tasks  in the area of non-bank consumer credit . These aspects  should be consider ed in more depth by the 
relevant Czech authorities before the draft law is adopted.  
As regards  the principle of financial independence, the fact that the supervised entities will contribut e to 
the cost of  ČNB  perform ing the new supervisory tasks , by paying  authorisation fees , has a positive impact 
on ČNB’s financial capacity to assume these tasks. This notwithstanding, it should be ensured that ČNB 
has sufficient human and material resources to carry out the new tasks without affecting its capacity to 
carry out its core central bank, ESCB- related and prudential supervisory  tasks.  Hence, ČNB  should be 
able to object  to the conferral of the new tasks on financial independence grounds, for example if 
assuming the task would mean that either ČNB  would not have sufficient means to focus primarily on its 
ESCB- related tasks or the discharge of the new tasks would impose a disproportionate burden on it.  
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 9 December 2015.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI