BIPAR INTRODUCTORY REMARKS

BIPAR welcomes this new opportunity provided by EBA to comment on its draft Guidelines on passport notifications for credit intermediaries under the Mortgage Credit Directive.

This issue is of great interest to BIPAR. The introduction in the Mortgage Credit Directive of a European passport for credit intermediaries is something BIPAR welcomed. The possibility for professional credit intermediaries to do business across the border, with the admission in the home Member State being sufficient to do so - at least in theory, is beneficial for competition, for consumers and for our industry. In a fully integrated credit market, consumers should benefit from increased competition between lenders, between intermediaries, which eventually translates into more product variety and lower prices.

We believe that credit intermediaries’ role can be an essential instrument for increasing cross border trade between EU Member States and to allow for greater access between EU Member States’ mortgage markets, providing a ready-made domestic distribution channel for those lenders wishing to enter EU national markets.

However, if we want this European Passport to work in practice, it is extremely important that as much as possible legal clarity and certainty is given to business.

Clarity and consistency in the content of the information to be notified re credit intermediaries wanting to operate cross border will be ensured by EBA guidelines. BIPAR welcomes that progress.

We believe that there is even a bigger need for legal clarity re the triggering element regarding FOS and FOE activities of credit intermediaries. The Directive speaks about the intention to perform FOS and FOE and indeed about the formalities to undertake but does not mention the triggering element for the FOS and FOE activities. Business hates regulatory uncertainty and a common understanding amongst regulators, credit intermediaries and their clients as to when an intermediary is undertaking business on a FOS or FOE basis is very important. Given the important role given to the host Member State in the MCD, it is crucial that the supervisory authorities have clarity. From the intermediary’s perspective it is essential to know whether host general good/other provisions apply.

It is important for the sake of legal certainty to clearly describe the triggering element of the FOS activities of an intermediary because general good rules or stricter/additional requirements of the host Member State may have to be complied with by the intermediaries when they are considered as carrying out FOS in that Member State. Is the credit intermediary doing FOS activities in a host Member State when he is carrying his activities with a customer who resides or is established in a Member State different from the home Member State of the intermediary? What about the location of the object of the mortgage credit? Is that the criterion?

We are aware that the EBA Guidelines do not deal with the definition or characteristics of the right of establishment and the freedom to provide services and that reference was made to the Commission’s interpretative Communication on the freedom to provide services and the interest of the General Good in the Second banking Directive.

However, that Communication is only a reference document, it is not binding and does not bring any clarifications regarding the triggering element(s) of credit intermediaries’ activities under FOS or FOE.

The document covers the banking services of credit institutions and not of intermediaries. It gives the Commission’s opinion on how to “locate” the place of supply of the banking service in order to determine whether the credit institutions is under FOE or FOS and needs to notify. A similar document focusing on the services of credit intermediaries would be extremely useful as their business model differs totally from the one of credit institutions. EIOPA Luxembourg Protocol addressed the issue for insurance intermediaries. We believe that a similar EBA document addressing the issue from a credit intermediary perspective would be extremely useful and would bring the legal clarity that business needs.


RESPONSE TO QUESTION 1

BIPAR welcomes the clarifications introduced in Guidelines 2 (Points e) and f) and 5.1 regarding specific information that is not always available at the time of the initial notification. Guidelines are now more in line with market reality.