Upcoming Regulation For Loan Servicers

Since its inception, loan servicing has not been a regulated activity.

This situation may change in light of the Draft Directive of the European Parliament and of the Council on Credit Servicers, Credit Purchasers and the Recovery of Collateral, dated 14 March 2018 (the "Directive").

Highlights

The Directive outlines the regulatory framework which is intended to apply to servicers, the main features being:

• Regulatory authorisation required before commencing its activities
• Public register of authorised servicers
• 10-year document keeping and annual assessment
• Cross-border servicing throughout the EU pursuant to a European Passport
• Compulsory appointment of an authorised servicer to service consumer loan.