The EBA publishes guidance to assess the knowledge and experience of the management or administrative organ of a credit servicer

The European Banking Authority (EBA) today published its final Guidelines on the assessment of adequate knowledge and experience of the management or administrative organ of a credit servicer as a whole, under the Non-Performing Loans Directive. The Guidelines aim at ensuring that the organs are suitable to conduct the business of the credit servicer in a competent and responsible manner.

To protect the integrity of the market and promote trust, it is crucial to ensure that the management or administrative organ of a credit servicer, as a whole, has sufficiently good repute and adequate knowledge and experience to conduct the business in a competent and responsible manner.

The Guidelines specify the criteria for the assessment of the organs’ collective knowledge and experience. This will be performed based on the individual members’ assessment by credit servicers, taking into account the principle of proportionality. The Guidelines also spell out the assessment process by credit servicers and competent authorities, which also covers the assessment of good repute of the members of the credit servicers organs. 

Legal basis and next steps

The Non-Performing Loans Directive (Directive (EU) 2021/2167) establishes a Union-wide framework for both purchasers and servicers of non-performing credit agreements issued by credit institutions, whereby credit servicers should obtain authorisation from, and be subject to the supervision of competent authorities. Credit servicers must ensure that their management or administrative organs meet the suitability requirements at all times, including where the business activities or the composition of the organ change.

The EBA has developed these Guidelines in accordance with Article 5(2) of the Non-Performing Loans Directive, which mandates the Authority to issue Guidelines on the adequate knowledge and experience of the management or administrative organ of credit servicers to conduct the business in a competent and responsible manner, to further harmonise the assessment of the adequate knowledge and experience of the management or administrative organ, as a whole, within the EU financial sector.  This is in line with the requirements under Article 16 of the EBA founding Regulation.

The EBA Guidelines will apply to credit servicers and to Competent Authorities across the EU.