Credit servicers

The Law of 15 July 2024 on the transfer of non-performing loans transposes, amongst others, Directive (EU) 2021/2167 of the European Parliament and of the Council of 24 November 2021 on credit servicers and credit purchasers and amending Directives 2008/48/EC and 2014/17/EU (“Directive 2021/2167”) into Luxembourg law.

In accordance with Article 1(1a-2) of the Law of 5 April 1993 on the financial sector (“LFS”), credit servicers may perform one or several of the following activities:

a) collecting or recovering from the borrower any payments due related to a creditor’s rights under a non-performing credit agreement or to the non-performing credit agreement itself;
b) renegotiating with the borrower any terms and conditions related to a creditor’s rights under a non-performing credit agreement, or of the non-performing credit agreement itself, in line with the instructions given by the credit purchaser, where the credit servicer is not a credit intermediary as defined in Article 3, point (f), of Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC (“Directive 2008/48/EC”) or in Article 4, point (5), of Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 (“Directive 2014/17/EU”);
c) administering any complaints relating to a creditor’s rights under a non-performing credit agreement or to the non-performing credit agreement itself;
d) informing the borrower of any changes in interest rates or charges or of any payments due related to a creditor’s rights under a non-performing credit agreement or to the non-performing credit agreement itself.

No person may have as a regular occupation or business the activity of credit servicer without holding a written authorisation of the CSSF in accordance with Article 28-14 of the LFS.

The CSSF’s prudential supervision extends to the Luxembourg credit servicers and to the activities these credit servicers carry out by way of free provision of services and/or by establishing branches in other EU Member States/States that are contracting parties to the EEA Agreement, as well as to credit service providers.

Credit servicers are defined as PFS; “PFS” means a group composed of:

• investment firms referred to in Part I, Chapter 2, Section 2, Subsection 1 of the LFS;
• specialised PFS referred to either in Part I, Chapter 2, Section 2, Subsection 2 or in Article 13 of the LFS and which do not belong to the categories of the first and third indents of this definition;
• support PFS referred to in Part I, Chapter 2, Section 2, Subsection 3 of the LFS;
• credit servicers referred to in Part I, Chapter 2, Section 2, Subsection 2b, of the LFS.