site.btaCabinet Approves Credit Servicers and Credit Purchasers Bill

Bulgaria's Council of Ministers on Wednesday approved the final version of a Credit Servicers and Credit Purchasers Bill. The draft legislation transposes the provisions of Directive (EU) 2021/2167 which updates Directives 2008/48/EC and 2014/17/EU, setting comprehensive regulations for entities handling non-performing loan agreements from lending institutions and credit purchasers.

The bill proposes measures to address high levels of non-performing loans (NPLs). It targets the development of a stable secondary market for absorbing surplus NPLs by lending institutions, improvement of conditions for cross-border NPL transfers, and ensuring high levels of borrower protection.

Credit servicers and credit purchasers would have ample transition periods to bring their activities into conformity with the new requirements.

The bill sets new requirements for credit purchasers and a licensing scheme for servicing NPL. NPL purchasers must delegate servicing to specialized credit servicers possessing the required expertise. The idea is to bolster transparency, safeguard borrower rights, and enhance public trust in NPL acquisition and servicing.

The Transitional and Final Provisions of the bill amend and supplement the Bulgarian National Bank Act, the Credit Institutions Act, the Consumer Credit Act, and the Consumer Credits Related to Immovable Property Act. These revisions vest the Bulgarian National Bank and the Commission for Consumer Protection with regulatory and supervisory powers vis-a-vis specified activities and entities.