NPL Archives

Renate Prinz in FinExtra: “Non-Performing Loans are now subject to regulation: What it means.”

by Renate Prinz on Mar 5, 2024
Posted In NPL

Let’s revisit the aftermath of the 2007-2008 financial crisis. Credit institutions faced a pressing challenge: unloading their massive non-performing loan (NPL) portfolios. Our legal team consistently assisted these institutions, clarifying possibilities, limitations, and crucially, what purchasers could not achieve. Surprisingly, the NPL market remained unregulated until now. Renate Prinz provides an overview on the new regulation on Non-Performing Loans in FinExtra and answers the following questions:

What are NPLs?
What is the NPL Directive?
What are the credit servicer obligations?
What are the NPL purchaser obligations?
How is the regulation handled?
How will new regulation change the NPL environment?

Licence requirement for credit service providers – services for non-performing loans now require a licence

When the Secondary Credit Market Act (Kreditzweitmarktgesetz) came into force on 30 December 2023, services relating to non-performing loans, i.e. loans that are no longer being settled or are at risk of default, will require a licence. Companies that already provide credit services today had to register with BaFin in February and state that they will continue to provide these services and now have until April to submit a licence application. A transitional regulation will then apply to them, under which the services can initially still be provided without a licence. In addition, the sale of NPLs by credit institutions [...]

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Renate Prinz in FinExtra: “Non-Performing Loans are now subject to regulation: What it means.”

Licence requirement for credit service providers – services for non-performing loans now require a licence

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