The directive was agreed in 2021 with a transposition deadline of 29 December 2023. The directive provides for a new EU wide authorisation and regulatory framework for credit servicers to be overseen by national competent authorities (which in the case of Ireland will be the Central Bank) and it allows such authorised entities to passport credit servicing activities across the EU. The directive applies to bank originated loans which are transferred after 29 December 2023. For credit agreements which fall outside the scope of the directive and these regulations, the existing national framework in relation to credit servicing firms will continue to apply.
In addition, the directive also makes certain amendments to the Consumer Credit Directive (2008) and the Mortgage Credit Directive (2014).
The directive contained a number of discretions which were the subject to a public consultation, of which the decisions on each discretion were published in the Department’s ‘Decisions on Discretions’ in June 2023. However, upon further consideration and consultation with the Central Bank of Ireland, there was a change in the decision regarding one of the discretions. An amended ‘Decisions on Discretions’ document incorporating this amended decision has been published on the Department’s website.
Speaking today, Minister McGrath said:
“The objective of this directive is to develop a secondary market for bank originated non-performing loans at an EU level. In particular, it provides for a common framework for the authorisation of credit servicers and allows such entities to provide such services in other Member States based on their authorization in a home Member State. The transposition of the directive also safeguards borrowers’ rights across the EU. The competent authority in Ireland’s case will be the Central Bank of Ireland, and its robust consumer protection framework will continue to apply.”
