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With the Council having adopted its position, the presidency can start negotiations with the European Parliament as soon as it is ready to negotiate.
A bank loan is generally considered non-performing when more than 90 days pass without the borrower (a company or a physical person) paying the agreed instalments or interest, or when it becomes unlikely that the borrower will reimburse it. Under the proposed new rules, banks will be able to better deal with loans that become non-performing thanks to improved conditions for selling the credit to third parties.
Currently, potential buyers of bad loans face barriers to cross-border purchases of credit due to different regulatory regimes in the member states. This has led to an inefficient secondary market for NPLs, with low demand, weak competition and low bid prices. The proposed new directive removes obstacles to the transfer of NPLs from banks to non-credit institutions, and simplifies and harmonises the authorisation requirements for credit services across the EU, without prejudice to national rules imposing certain additional requirements on credit services.
At the same time, the rights of borrowers will be protected and the safeguards under the applicable EU consumer protection rules remain in place.