NPL Update: EU Credit Servicing Directive Transposed Into Irish Law

The EU Credit Servicing Directive was transposed into Irish law from 30 December 2023. It applies only to post-transposition sales and servicing of NPLs originated by EU banks (the Directive defines NPLs as loans classified as non-performing exposures under Article 47a of the Capital Requirements Regulation).

As expected, the Irish Regulations confirm that two frameworks will run in parallel:

• the Directive's framework will apply to post-transposition sales and servicing of NPLs originated by EU banks; and
• the existing Irish credit servicing framework (under which holding legal title to a credit agreement can trigger an authorisation requirement) will continue to apply to the sale and servicing of performing loans, pre-transposition NPLs originated by EU banks, and the sale and servicing of NPLs originated by non-bank lenders.