The Bank of Spain will supervise servicers, platforms that manage the recovery and sale of portfolios of non-performing loans (NPL) and real estate assets sold by banks, such as Intrum, Servihabitat, DoValue, Hipoges, Diglo and Lexer. Their competence will come with the regulations being finalised by the government to transpose into national law the 2021/2167 directive approved in 2021 in Europe and which countries had to incorporate before 29 December last, according to sources familiar with the document, as confirmed to elEconomista.es.
The industry has been in favour of the Bank of Spain from the outset because of the nature of the assets managed by the servicers (portfolio of debt and banking assets), although their allocation was not entirely clear.
The reluctance was due to the fact that they are not financial institutions, but the agency already supervises other non-financial companies with functions related to the sector, such as valuers or money transfer companies. The directive regulates a sector that, in Spain as in many other countries, lacks specific and comprehensive regulation.
It aims to establish a common legal framework for credit managers and purchasers of portfolios originated by European banks. Most countries have implemented the Directive, but the early elections in Spain interrupted the process.
The regulation will require credit managers to be authorised in one EU member state and then be able to operate in any other with a European passport, and it will be the supervisors of those countries who will monitor their activities on the portfolios they manage in each market. An official register will be set up for authorised persons.
They will have to comply with certain requirements, such as having a registered office in a Member State, having sound governance systems and adequate internal control mechanisms, or dealing diligently and efficiently with the claims of the holders of the loans they manage.
Doubtful loan portfolios
The competent authorities will have supervisory, investigative and sanctioning powers and may even revoke the authorisation in certain circumstances. Purchasers of portfolios will not be subject to authorisation requirements, but will be subject to certain reporting and other requirements, such as the appointment of a credit manager if they do not perform this function themselves.
For their part, banks will have specific reporting obligations to potential purchasers to enable them to value the portfolios and will have to report to the supervisor on the transactions they undertake. For the customer or creditor, protection will be improved by obliging the purchaser of his debt to notify him of the transfer.
When transposing the Directive, the Member States may apply more ambitious rules than those laid down in the Directive, such as extending its application to portfolios held by operators other than banks, but the tendency in the Member States has been to limit it to portfolios of doubtful debts whose sale or transfer has taken place since 1 January. This application would exclude portfolios of, for example, mortgages or short-term receivables.
Original Story: El Economista | Author: Eva Contreras
Translation and Edition: Prime Yield