46 Amendments of Dimitrios PAPADIMOULIS related to 2018/0063(COD)
Amendment 215 #
Proposal for a directive
Recital 4 a (new)
Recital 4 a (new)
(4 a) In the process of developing macro-prudential approaches to prevent the emergence of system-wide risks associated with NPEs, the European Systemic Risk Board should develop appropriate macro-prudential standards and supervision of the other financial institutions involved in the secondary market for NPEs. These regulatory measures will ensure that such institutions are required to meet the same standards as banks, including in relation to prudential requirements, disclosure requirements and the fair treatment of borrowers. These institutions should also be bound by all relevant national and EU consumer protection requirements that may be applicable.
Amendment 216 #
Proposal for a directive
Recital 5
Recital 5
(5) Credit institutions will be required to put aside sufficient resources when new loans become non- performing, which should create appropriate incentives to address NPLs at an early stage and should prevent an excessive accumulation of them. Where loans become non- performing, more efficient enforcement mechanisms for secured loans would allow credit institutions to enforce NPLs, subject to appropriate safeguards for borrowers including legal protection against evictions from primary residences. Nevertheless, should NPL stocks become too high – as it is currently the case for some credit institutions and some Member States – credit institutions should be able to sell them in efficient, competitive and transparent secondary markets to other operatorsincentivised to work through the NPLs on a case-by-case basis. This Directive does not express a preference for certain NPL reduction tools over others, and the combination of tools or strategy reduction drivers for a given credit institution is the responsibility of, and chosen at the discretion of, its management. Competent authorities of credit institutions will guide them in this, based on their existing bank- specific, so-called Pillar 2, powers under Regulation (EU) No 575/2013 of the European Parliament and of the Council27 (CRR). Where NPLs become a significant and broad-based problem, Member States can set up national asset management companies or other alternative measures within the framework of current state aid and banks resolution rules. _________________ 27Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1).
Amendment 217 #
Proposal for a directive
Recital 5
Recital 5
(5) Credit institutions will be required to put aside sufficient resources when new loans become non- performing, which should create appropriate incentives to address NPLs at an early stage and should prevent an excessive accumulation of them. Where loans become non- performing, more efficient enforcement mechanisms for secured loans would allow credit institutions to enforce NPLs, subject to appropriatimplement a holistic strategy that protects distressed borrowers and safeguards the sustainability of the banking system, subject to strong and effective safeguards for borrowconsumers. Nevertheless, should NPL stocks become too high – as it is currently the case for some credit institutions and some Member States – credit institutions shouldall not be able to sell them in efficient, competitive and transparent secondary marketsor transfer to other operators. Competent authorities of credit institutions will guide them in this, based on their existing bank-specific, so-called Pillar 2, powers under Regulation (EU) No 575/2013 of the European Parliament and of the Council27 (CRR). Where NPLs become a significant and broad-based problem, Member States can set up national asset management companies or other alternative measures within the framework of current state aid and banks resolution rules. _________________ 27Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1)ird parties performing credit agreements concluded with consumers. Where NPLs become a significant and broad-based problem, Member States can set up national asset management companies or other alternative measures within the framework of current state aid and banks resolution rules.
Amendment 225 #
Proposal for a directive
Recital 9
Recital 9
(9) This Directive should fosregulater the development of secondary markets for NPLs in the Union by removing impediposing safeguards and minimum requirements to the transfer of NPLs by credit institutions to non-credit institutions, while at the same time safeguarding consumers' rights. Any proposed measure should also simplify and harmonise the authorisation requirements for credit servicers. This Directive should therefore establish a Union-wide framework for both purchasers and servicers of credit agreements issued by credit institutions, whereby credit servicers shall obtain authorisation and be subject to the supervision of the Member State they operate in; furthermore, this Directive allows Member States to subject credit servicers and credit purchasers to stricter requirements.
Amendment 227 #
Proposal for a directive
Recital 9
Recital 9
(9) This Directive should foster the development of secondary markets for NPLs in the Union by removing impediments to the transfer of NPLs by credit institutions to non-credit institutions, while at the same time safeguarding consumers' rights, particularly legal protection for mortgage-holders against eviction from primary residences. Any proposed measure should also simplify and harmonise the authorisation requirements for credit servicers. This Directive should therefore establish a Union-wide framework for both purchasers and servicers of credit agreements issued by credit institutions.
Amendment 228 #
Proposal for a directive
Recital 9 a (new)
Recital 9 a (new)
(9 a) Other financial institutions active in the secondary market should take into account the interests of consumers and comply with all relevant national and EU consumer protection requirements, including those set out in Article 28 of Directive 2014/17/EU, in the EBA Guidelines on arrears and foreclosure and in the EBA final Guidelines on the management of non-performing and forborne exposures.
Amendment 229 #
Proposal for a directive
Recital 9 b (new)
Recital 9 b (new)
(9 b) Forbearance measures should aim to return the borrower to a sustainable performing repayment status, having regard to the fair treatment of the consumer and to all relevant national and EU consumer protection requirements that may be applicable. When deciding on which steps or forbearance measures to take, credit institutions should take into account the interests of consumers and comply with consumer protection requirements, including those set out in Article 28 of Directive 2014/17/EU, in the EBA Guidelines on arrears and foreclosure and in the EBA final Guidelines on the management of non- performing and forborne exposures;
Amendment 230 #
Proposal for a directive
Recital 9 c (new)
Recital 9 c (new)
(9 c) Forbearance measures may include the following concessions to the consumer: a) a total or partial refinancing of a credit agreement; b) a modification of the previous terms and conditions of a credit agreement, which may include among others: i. extending the term of the mortgage; ii. changing the type of the mortgage (such as, changing the type of mortgage from a capital and interest mortgage to an interest only mortgage); iii. deferring payment of all or part of the instalment repayment for a period; iv. changing the interest rate up to a certain cap; v. offering a payment holiday.
Amendment 233 #
Proposal for a directive
Recital 15
Recital 15
Amendment 235 #
Proposal for a directive
Recital 16
Recital 16
(16) Therefore, action at Union level is necessary in order to address the protection of the borrowers as well as the sustainability of the banking system and the position of credit purchasers and credit servicers in relation to credit originally granted by credit institutions. It is not proposed to cover credit originally issued by non-credit institutions or debt collection in general at this stage, as there is no evidence of macroeconomic relevance, misaligned incentives or ill-functioning markets for such an extended scope.
Amendment 238 #
Proposal for a directive
Recital 16 a (new)
Recital 16 a (new)
(16 a) Entities engaging in credit servicing activities shall be subject to the same rules, be it specialised credit servicers, banking institutions or credit purchasers. This could be a direct consequence of subjecting credit servicing activities to the rules of Directive 2014/65/EU.
Amendment 239 #
Proposal for a directive
Recital 17
Recital 17
(17) Although the purpose of this Directive is to protect consumers' rights and to strengthen the credit institutions' capacity to deal with credit that has become non-performing or risks becoming non-performing, the secondary market for credit covers both performing and non- performing credit. Actual market sales encompass credit portfolios, consisting of a mix of performing,heavily under- performing and non- performing credit. The portfolios include credit that is both secured and unsecured and that is owed by consumers or businesses. Where rules for the enforcement of credit differed for each type of credit or borrower, there would be additional costs to the packaging of those credit portfolios for sale. The provisions in this Directive that target the development of the secondary market cover performing and non- performing credit in order to avoid a situation that these additional costs would result to a social crisis and at the same time discourage investor participation and fragment this emerging market. Credit institutions will benefit from facing a larger investor base and more efficient credit servicers. Similar benefits will accrue to asset management companies that are instrumental in some Member States in marketing both non-performing and performing credit originated from credit institutions that had been resolved or been restructured or that have otherwise offloaded them from their balance sheets28 . _________________ 28 See Commission staff working document SWD(2018 72) on the AMC Blueprint.
Amendment 242 #
Proposal for a directive
Recital 18
Recital 18
(18) The importance placed by the Union legislature on the protection provided for consumers in Directive 2014/17/EU of the European Parliament and of the Council29 , Directive 2008/48/EC of the European Parliament and of the Council30 and Council Directive 93/13/EEC31 means that the assignment of the creditor's rights under a credit agreement or of the agreement itself to a credit purchaser should not affect the level of protection granted by national and Union law to consumers in any way. Credit purchasers and credit servicers should therefore comply with national and Union law as applicable to the initial credit agreement and the consumer should retain the same level of protection as provided under Union law or as determined by Union or national conflict of law rules regardless of the law applicable to the credit purchaser or credit servicer. National competent authorities must ensure that no borrower is worse off following the transfer of their credit agreement from a credit institution to a credit purchaser or credit servicer. _________________ 29Directive 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 (OJ L 60, 28.2.2014, p. 34). 30Directive 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 (OJ L 60/34, 22.5.2008, p. 66). 31Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ L 95, 21.4.1993, p. 29).
Amendment 245 #
Proposal for a directive
Recital 20
Recital 20
(20) In order to ensure a high level of consumer protection, Union and national law provide for a number of rights and safeguards related to credit agreements promised or granted to a consumerthat are not consumer loans, in particular those secured by the primary residential property. Those rights and safeguards apply in particular to the negotiation and conclusion of the credit agreement and to its performance or default thereof. This is notably the case in relation to long-term consumer credit agreements falling within Directive 2014/17/EU, in respect of the right of the consumer to discharge fully or partially his obligations under a credit agreement prior to the expiry of that agreement or to be informed by means of the European Standardised Information Sheet, where applicable, on the possiblehowever a transfer of the credit agreement to a credit purchaser. B should not be allowed whatsoever as borrower rights should also not be altered if the transfer of the credit agreement between a credit institution and a purchaser takes the form ofunder any circumstance or contract novation.
Amendment 246 #
Proposal for a directive
Recital 20 a (new)
Recital 20 a (new)
(20 a) Residential mortgages for primary residences should be excluded from the scope of this Directive.
Amendment 248 #
Proposal for a directive
Recital 23
Recital 23
(23) In order to allow existing credit purchasers and credit servicers to adapt to the requirements of the national provisions implementing this Directive and, in particular, to allow credit servicers to be authorised, this Directive will only apply to transfers of credit agreements that take place six months after the transposition deadline has expired and only after the creditors have given to distressed borrowers the right to buy back their debt at the same price.
Amendment 255 #
Proposal for a directive
Recital 34
Recital 34
(34) Third-country credit purchasers may make it harder for the Union consumer to rely on their rights under Union law and for the national authorities to supervise the enforcement of the credit agreement. Credit institutions may also be discouraged from transferring such credit agreements to third-country credit purchasers because of the reputational risk involved. Imposing an obligation on the representative of the third-country purchasers of consumer credit to appoint a credit institution or a credit servicer authorised in the Union for servicing a credit agreementAs a result, both the credit purchasers and credit servicers operating in the Union must be obliged to be authorised in the Union to ensures that the same standards of consumers' rights are preserved after the transfer of the credit agreement. The credit purchaser and credit servicer isare under an obligation to respect the applicable Union and national laws and the national authorities in individual Member States should be given the necessary powers to effectively supervise itstheir activityies.
Amendment 256 #
Proposal for a directive
Recital 34 a (new)
Recital 34 a (new)
(34 a) Credit purchasers generally reply on a short-term business model that specialises in purchasing distressed debt at a large discount and attempting to procure the underlying asset as quickly as possible. As it is the credit purchaser that makes the key decisions regarding the distressed loan, including on the setting of interest rates, whether to restructure a loan, and the enforcement of the loan, it is crucial that the credit purchaser - and not only the credit servicer that acts as an intermediary - is authorised and regulated in the Union, and subject to supervision, investigation and sanctions by the national competent authorities in the Member State in which it operates.
Amendment 265 #
Proposal for a directive
Article 1 a (new)
Article 1 a (new)
Article 1 a This directive relates to non-performing credit agreements. Creditors shall not be allowed to transfer to third parties performing credit agreements concluded with consumers. 1. Creditors shall make every effort to avoid transferring consumer non- performing loans to third parties. Notably, Member States shall ensure that creditors exercise reasonable forbearance towards the distressed borrowers, in accordance with Article 28 of Directive 2014/17/EU and the EBA Guidelines on arrears and foreclosure EBA/GL/2015/12. 2. Forbearance measures may include the following concessions to the consumer: a) a total or partial refinancing of a credit agreement; b) a modification of the previous terms and conditions of a credit agreement, which may include among others: i. extending the term of the mortgage; ii. changing the type of the mortgage (such as, changing the type of mortgage from a capital and interest mortgage to an interest only mortgage); iii. deferring payment of all or part of the instalment repayment for a period; iv. changing the interest rate up to a certain cap; v. offering a payment holiday. 3. Definition of non-performing loans adopted by the Commission Implementing Regulation (EU) 2015/227 shall be without prejudice to the creditors’ forbearance obligations. 4. In case of foreclosure, when the credit is secured by the consumer’s primary residence, return or transfer to the creditor or a third-party of the security or proceeds from the sale of the security shall be sufficient to repay the credit. Article 28(4) of Directive 2014/17/EU shall be amended accordingly.
Amendment 266 #
Proposal for a directive
Article 1 b (new)
Article 1 b (new)
Article 1 b Rules of conduct for credit servicers and credit purchasers 1. Credit servicers and credit purchasers shall act in good faith, treat consumers fairly and respect their privacy. The following practices shall be forbidden: a. Provision of misleading information to consumers; b. Harassment of consumers, including communication of information about the consumers’ debt to their employer, family, friends and neighbours; c. Charging fees and penalties to consumers that exceed the costs directly related to the management of the debt. Member States shall place a cap on those fees and penalties according to principles of fairness, rationality and proportionality.
Amendment 280 #
Proposal for a directive
Article 2 – paragraph 4 – point c a (new)
Article 2 – paragraph 4 – point c a (new)
(c a) the purchase of a credit agreement by a credit institution or non credit institution which has been involved in a tax avoidance or tax evasion case in any Member State of the EU;
Amendment 300 #
Proposal for a directive
Article 3 b (new)
Article 3 b (new)
Article 3 b Exclusion of primary residences Residential mortgages for primary residences are excluded from the scope of this Directive.
Amendment 301 #
Proposal for a directive
Article 4 – paragraph 1 a (new)
Article 4 – paragraph 1 a (new)
1 a. Member States shall be able to maintain the existing national measures aimed at protecting distressed borrowers, as well to adopt stricter measures, such as personal insolvency measures, restriction of the activity of credit servicers and credit purchasers.
Amendment 305 #
Proposal for a directive
Article 5 – paragraph 1 – point a a (new)
Article 5 – paragraph 1 – point a a (new)
(a a) Credit servicers and credit purchasers shall act in good faith, treat consumers fairly and respect their privacy. The following practices shall be forbidden: a) Provision of misleading information to consumers; b) Harassment of consumers, including communication of information about the consumers’ debt to their employer, family, friends and neighbours; c) Charging fees and penalties to consumers that exceed the costs directly related to the management of the debt. Member States shall place a cap on those fees and penalties according to principles of fairness, rationality and proportionality.
Amendment 322 #
Proposal for a directive
Article 5 – paragraph 1 a (new)
Article 5 – paragraph 1 a (new)
1 a. When a credit institution intends to transfer a credit agreement to a credit purchaser at a specified price, before the transfer the credit institution shall allow the debtors concerned who are consumers to buy back their debt at the same price or with a small mark-up, which would be specified by the relevant competent authorities. For that purpose, credit institutions shall be required to disclose to the relevant competent authorities the necessary details of expected deals with credit purchasers.
Amendment 323 #
Proposal for a directive
Article 5 – paragraph 1 b (new)
Article 5 – paragraph 1 b (new)
1 b. Member States shall ensure that the buy-back option can be exercised in instalments.
Amendment 331 #
Proposal for a directive
Article 6 a (new)
Article 6 a (new)
Article 6 a Debt buy-back 1. When a credit institution intends to transfer a credit agreement to a credit purchaser at a specified price, before the transfer the credit institution shall allow the debtors concerned who are consumers to buy back their debt at the same price or with a small mark-up, which would be specified by the relevant competent authorities. For that purpose, credit institutions shall be required to disclose to the relevant competent authorities the necessary details of expected deals with credit purchasers. 2. Member States shall ensure that the buy-back option can be exercised in instalments.
Amendment 346 #
Proposal for a directive
Article 10 – paragraph 1 – introductory part
Article 10 – paragraph 1 – introductory part
1. Member States shall ensure that where a credit servicer uses a third party to perform activities that would normally be undertaken by that credit servicer ('credit service provider'), the credit servicer should be supervised by the same supervisory authorities the banking system of the Member State has and remains fully responsible for complying with all obligations under the national provisions transposing this Directive. The outsourcing of those credit servicing activities shall be subject to the following conditions:
Amendment 349 #
Proposal for a directive
Article 10 a (new)
Article 10 a (new)
Article 10 a Right to legal representation 1. In any court hearing involving a distressed borrower there shall be consideration of the equality of representation status to ensure a full and fair hearing and full and complete understanding of all of the parameters and legal contentions being addressed. 2. This demands that there be an equivalent of legal representation provided and available to all distressed borrowers and, insufficient advance, to ensure comprehensive preparation of all relevant facts and detail for appropriate court representation of the case in dispute. 3. Where necessary, this service shall be provided at the cost of the Member State through free legal aid or its equivalent.
Amendment 352 #
Proposal for a directive
Article 11 – paragraph 1 a (new)
Article 11 – paragraph 1 a (new)
1 a. With regard to credit agreements concluded between creditors and consumers, as well as credit agreements concluded between creditors and business borrowers secured by the immovable residential property which is the primary residence of a business borrower, a credit servicer shall be required to obtain an authorisation and establish a branch or a subsidiary in the Member State where it intends to operate.
Amendment 358 #
Proposal for a directive
Article 12 – paragraph 1 a (new)
Article 12 – paragraph 1 a (new)
1 a. Credit servicers shall not be allowed to provide cross-border services in respect of credit agreements concluded between creditors and consumers, as well as credit agreements concluded between creditors and business borrowers secured by the immovable residential property which is the primary residence of a business borrower. In that case, credit servicers shall be authorised and supervised by the competent authorities of the Member State where they effectively operate.
Amendment 383 #
Proposal for a directive
Article 13 a (new)
Article 13 a (new)
Article 13 a Credit purchasers subject to national law A credit purchaser carrying out activities in a Member State is subject to the restrictions and requirements established in the national law of the Member State in accordance with this Directive.
Amendment 397 #
Proposal for a directive
Article 15 – paragraph 1
Article 15 – paragraph 1
1. Member States shall ensure that the represente direct regulativeon of a credit purchaser referred to in Article 17(1) appoints a credit institution established in the Union or its subsidiary established s operating in their jurisdiction by ensuring the Union or an authorised credit servicernational competent authorities are empowered to superform credit servicing activities in respect of credit agreements concluded with consumvise, investigate and sanction the credit purchasers.
Amendment 400 #
Proposal for a directive
Article 15 – paragraph 2
Article 15 – paragraph 2
Amendment 401 #
Proposal for a directive
Article 15 – paragraph 2
Article 15 – paragraph 2
2. Member States shall ensure that a credit purchaser is not subject to any necessary additional requirements for the purchase of credit agreements other than as provided for by the national measures transposing this Directive.
Amendment 411 #
Proposal for a directive
Article 17
Article 17
Amendment 413 #
Proposal for a directive
Article 18 – paragraph 1 – introductory part
Article 18 – paragraph 1 – introductory part
1. Member States shall ensure that a credit purchaser, entities or, where applicable, its representative designated in accordance with Article 17, shall be subject to the same rules, be it specialised credit servicers and banking institutions; moreover, it communicates to the competent authorities of the Member State where the credit purchaser or, where applicable its representative is domiciled or established that it intends to directly enforce a credit agreement by providing the following information:
Amendment 414 #
Proposal for a directive
Article 18 – paragraph 1 – introductory part
Article 18 – paragraph 1 – introductory part
1. Member States shall ensure that a credit purchaser or, where applicable, its representative designated in accordance with Article 17, communicates to the competent authorities of the Member State where the credit purchaser or, where applicable its representative is domiciled or establishedcommunicates to the competent authorities of the Member State that it intends to directly enforce a credit agreement by providing the following information:
Amendment 423 #
Proposal for a directive
Article 19 – paragraph 1 a (new)
Article 19 – paragraph 1 a (new)
1 a. Member States shall require the national competent authorities to make publicly available information regarding the transfer of credit agreements from a credit institution to a credit purchaser, or from a one credit purchaser to another, including the identity and address of the new credit purchaser and, where applicable, its representative designated in accordance with Article 17.
Amendment 440 #
Proposal for a directive
Article 22 – paragraph 1 – point b
Article 22 – paragraph 1 – point b
(b) a credit purchaser or credit servicer's governance arrangements and internal control mechanisms fail to ensure respect for borrower rights and compliance with personal data protection rules;
Amendment 441 #
Proposal for a directive
Article 22 – paragraph 1 – point c
Article 22 – paragraph 1 – point c
(c) a credit purchaser or credit servicer's policy is inadequate for the proper treatment of borrowers as set in Article 5(1)(d);
Amendment 442 #
Proposal for a directive
Article 22 – paragraph 1 – point d
Article 22 – paragraph 1 – point d
(d) a credit purchaser or credit servicer's internal procedures fail to provide for the recording and handling of borrower complaints according to the obligations set in the national measures transposing this directive;
Amendment 476 #
Proposal for a directive
Article 35 – paragraph 1 – point a
Article 35 – paragraph 1 – point a
(a) the identity of the credit servicer and, where applicable, the credit purchaser it is providing a service to;
Amendment 478 #
Proposal for a directive
Article 37 a (new)
Article 37 a (new)
Article 37 a State aid The Commission shall investigate whether the past sale of credit agreements by publicly owned, or partially publicly owned, credit institutions to credit purchasers which have received special tax advantages may have constituted illegal state aid.
Amendment 479 #
Proposal for a directive
Article 40 – paragraph 1
Article 40 – paragraph 1
1. FiveTwo years after the entry into force of this Directive, the Commission shall carry out an evaluation of this Directive and present a Report on the main findings to the European Parliament, the Council and the European Economic and Social Committee.
Amendment 480 #
Proposal for a directive
Article 40 – paragraph 1 a (new)
Article 40 – paragraph 1 a (new)
1 a. The Commission's impact assessment carried out prior to the proposal for this Directive failed to take into account the impact of the Directive on EU citizens human rights under the Charter of Fundamental Rights. The transposition of this Directive must be delayed until the Commission produces a new assessment that takes into account the impact of this Directive on the Charter rights of EU citizens.