Non-Performing Loans (NPLS)



In 2018, the European Commission proposed the Directive on credit servicers, credit purchasers and the recovery of collateral intended to prevent excessive future build-up of NPLs on banks' balance sheets. The proposed Directive is being reviewed by the European Commission and is currently in the political trilogue stage.

Current work:

The ACC welcomes the progress and reform of the proposed Directive as well as policymakers’ recognition of the need to encourage the development of an efficient secondary market for non-performing loans (NPLs). However, it is the ACC’s view that the proposed Directive must be fundamentally reconsidered in light of the current environment, notably:

  1. the scope of the Directive should be firmly and consistently limited to the regulation of non-performing loans;
  2. additional borrower protection measures should not be introduced in the context of this Directive; and 
  3. reporting requirements should be aligned with existing market practice.

Upcoming actions: 

The European Parliament, Council and Commission are now working on the technical aspects of the Directive. Thereafter, the agreement must be approved by the Economic and Monetary Affairs Committee and the Parliament as a whole, as well as by the Council, before finally being published in the Official Journal. This is expected to be completed before the Summer break.

(Last updated: 29 June 2021)