Political agreement has finally been reached on the scope of the
proposed Directive on credit servicers and credit purchasers.
Following lengthy negotiations, its scope has been narrowed to the
servicing (on behalf of a credit purchaser) of NPLs originated by
EU banks, and the purchase of NPLs originated by EU banks. In-scope
servicers will require authorisation, but in-scope purchasers will
not. The Irish credit servicing framework will require some
amendments as a result.
Agreement Reached
The European Commission proposed the
Directive as part of its strategy to reduce current stocks of
non-performing loans (NPLs) on EU banks'
balance sheets, and prevent future NPL build-ups. It was keen to
facilitate the disposal, by EU banks, of NPL portfolios in
"efficient, competitive and transparent secondary
markets", and to introduce a harmonised EU-wide framework
for NPL purchasers and NPL servicers whereby NPL servicers must be
authorised on a harmonised basis across
