New legislative developments of the Directive for servicers and NPLs: information that credit institutions must facilitate NPL buyers

The Implementing Regulation develops the 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 (‘Servicers and NPLs Directive’).

The servicers and NPLs Directive creates a common framework for credit buyers (known as ‘servicers’) and for the buyers of non-performing loans or NPLs, with the intention of  harmonising the authorisation requirements applicable to servicers and their regulation. The servicers and NPLs Directive has not yet been transposed into Spanish law, and the deadline for this is set for the 29 December 2023. It is hoped that this Directive, once transposed, will have a significant impact, as the course of business of servicers will be dependent on a prior administrative authorisation.

The Implementing Regulation intends to articulate, through templates, the necessary information that the credit institution will have to provide NPLs buyers, including, among other issues: 

• The value of the creditor´s rights from the NPL or the value of the NPL itself
• The probability of recovering their value, through templates of data related to those credits. 

Such legislation will facilitate the sale of NPLs in secondary markets and will reduce entry barriers to the market for credit institutions and small-scale investors who wish to carry out NPL sale transactions.

While the European legislative developments of the Directive for servicers and NPLs are underway, ideally the transposition of the Directive in Spain will also progress, in order to provide legal certainty to stakeholders, creating a level playing field’ compared to other EU countries.