MT
CREDIT SERVICERS AND CREDIT PURCHASERS ACT
Table of Provisions (34)
Statutory Text (34 Articles)
CHAPTER 645
CREDIT SERVICERS AND CREDIT PURCHASERS
ACT
AN ACT to provide for the establishment of a framework for the
regulation of credit purchasers, as well as credit servicers acting on behalf of
such credit purchasers, of a creditor’s rights under a non-performing credit
agreement, or of the non-performing credit agreement itself, issued by a
credit institution established in the European Union; and to amend the
Insurance Business Act and the Investment Services Act.
30th July, 2024
ACT XXXII of 2024, as amended by Act XI of 2025.
(1)
The short title of this Act is the Credit Servicers and
Credit Purchasers Act.
(2)
The principal scope of this Act is to transpose the relevant
provisions of the Directive (EU) 2021/2167 of the European
Parliament and of the Council of 24 November 2021 on credit
servicers and credit purchasers and amending Directives 2008/48/EC
and 2014/17/EU (NPL Directive), and it shall be interpreted and
applied in accordance with the said Directive.
(1)
In this Act, unless the context otherwise requires
"applicant" means a legal person established in Malta
applying to the competent authority to act as a credit servicer in
accordance with article 7;
"binding legal instrument" means any directly applicable
measures, including but not limited to, any implementing
technical standards, regulatory technical standards or similar
measures issued in accordance with European Union
legislation;
"borrower" means a legal or natural person who has
concluded a credit agreement with a credit institution, including
its legal successor or assignee;
"competent authority" means the Malta Financial
Services Authority established by the Malta Financial Services
Authority Act;
"Conduct of Business Rules" means Rules, other than
Credit Servicing Rules, issued by the competent authority in
accordance with this Act;
"consumer" means a natural person who, in credit
agreements regulated by this Act or any regulations made
thereunder, or Credit Servicing Rules or Conduct of Business
CREDIT SERVICERS AND CREDIT PURCHASERS
Rules issued thereunder, is acting for purposes which are
outside his trade, business or profession;
"CRD" means Directive 2013/36/EU of the European
Parliament and of the Council of 26 June 2013 on access to the
activity of credit institutions and the prudential supervision of
credit institutions, amending Directive 2002/87/EC and
repealing Directives 2006/48/EC and 2006/49/EC, as may be
amended from time to time, and includes any binding legal
instruments, guidelines and other measures that have been or
may be issued thereunder;
"credit agreement" means an agreement as originally
issued, modified or substituted, whereby a credit institution
grants a credit in the form of a deferred payment, a loan or other
similar financial accommodation;
"credit institution" means a credit institution as defined
in point (1) of Article 4(1) of the CRR;
"credit purchaser" means any natural or legal person,
other than a credit institution, that purchases a creditor’s rights
under a non-performing credit agreement, or the non-
performing credit agreement itself, in the course of its trade,
business or profession, in accordance with applicable European
Union law and national law;
"credit service provider" means a third party used by a
credit servicer to perform any of the credit servicing activities;
"credit servicer" means a legal person that, in the course
of its business, manages and enforces the rights and obligations
related to a creditor’s rights under a non-performing credit
agreement, or to the non-performing credit agreement itself, on
behalf of a credit purchaser, and which carries out at least one
(1) or more credit servicing activities;
"credit servicing activities" means one (1) or more of the
following activities
(a)
collecting or recovering from the
borrower, in accordance with national law, any payments
due related to a creditor’s rights under a credit agreement
or to the credit agreement itself;
(b)
renegotiating with the borrower, in
accordance with national law, any terms and conditions
related to a creditor’s rights under a credit agreement, or
of the credit agreement itself, in line with the
instructions given by the credit purchaser, where the
credit servicer is not a credit intermediary as defined in
Article 3(f) of Directive 2008/48/EC or in Article 4(5) of
Directive 2014/17/EU;
(c)
administering any complaints relating to a
creditor’s rights under a credit agreement or to the credit
agreement itself; and, or
(d)
informing the borrower of any changes in
interest rates or charges or of any payments due related
to a creditor’s rights under a credit agreement or to the
credit agreement itself;
"credit servicing agreement" means a written contract
concluded between a credit purchaser and a credit servicer
concerning the services to be provided by the credit servicer on
behalf of the credit purchaser;
"Credit Servicing Rules" means Rules, other than
Conduct of Business Rules, which may be issued by the
competent authority in accordance with this Act;
"creditor" means a credit institution that has issued a
credit or a credit purchaser;
"CRR" means Regulation (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, as
amended from time to time, and includes any binding legal
instruments, guidelines and other measures that have been or
may be issued thereunder;
"designated representative" means the representative of
a third-country credit purchaser designated in accordance with
article 17;
"Directive 98/5/EC" means Directive 98/5/EC of the
European Parliament and of the Council of 16 February 1998 to
facilitate the practice of the profession of lawyer on a
permanent basis in a Member State other than that in which the
qualification was obtained, as may be amended from time to
time, and includes any binding legal instruments, guidelines
and other measures that have been, or may be issued
thereunder;
"Directive 2008/48/EC" means Directive 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, as may be amended from time to time,
and includes any binding legal instruments, guidelines and
other measures that have been, or may be issued thereunder;
CREDIT SERVICERS AND CREDIT PURCHASERS
"Directive 2009/65/EC" means Directive 2009/65/EC of
the European Parliament and of the Council of 13 July 2009 on
the coordination of laws, regulations and administrative
provisions relating to undertakings for collective investment in
transferable securities (UCITS), as may be amended from time
to time, and includes any binding legal instruments, guidelines
and other measures that have been, or may be issued
thereunder;
"Directive 2011/61/EU" means Directive 2011/61/EU of
the European Parliament and of the Council of 8 June 2011 on
Alternative Investment Fund Managers and amending
Directives 2003/41/EC and 2009/65/EC and Regulations (EC)
No. 1060/2009 and (EU) No. 1095/2010, as may be amended
from time to time, and includes any binding legal instruments,
guidelines and other measures that have been, or may be issued
thereunder;
"Directive 2014/17/EU" means Directive 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, as may be
amended from time to time, and includes any binding legal
instruments, guidelines and other measures that have been, or
may be issued thereunder;
"European regulatory authority" means a body or bodies
designated by a Member State other than Malta in accordance
with Article 21(3) of the NPL Directive to carry out the
functions and duties stipulated in the said Directive;
"GDPR" means Regulation (EU) 2016/679 of the
European Parliament and of the Council of 27 April 2016 on the
protection of natural persons with regard to the processing of
personal data and on the free movement of such data, and
repealing Directive 95/46/EC (General Data Protection
Regulation), as may be amended from time to time, and
includes any binding legal instruments, guidelines and other
measures that have been, or may be issued thereunder;
"home Member State" means, with respect to a credit
servicer, the Member State in which its registered office is
situated or, if under its national law it has no registered office,
the Member State in which its head office is situated or, with
respect to a credit purchaser, the Member State in which the
credit purchaser or its representative is domiciled, or its
registered office is situated, or if under its national law it has no
registered office, the Member State in which its head office is
situated;
"host Member State" means the Member State, other
than the home Member State, in which a credit servicer has
established a branch or where it provides credit servicing
activities, and in any event where the borrower is domiciled, or
its registered office is situated or, if under its national law it has
no registered office, the Member State in which its head office
is situated;
"licence" means a licence to carry out credit servicing
activities issued under this Act;
"licence holder" means a person who holds a licence;
"management body" means the body or bodies of a legal
person, which is appointed in accordance with the applicable
law and which is empowered to set the strategy, objectives and
overall direction of the legal person, and which oversees and
monitors management decision-making, and includes the
persons who effectively direct the business of the legal person;
"Member State" means a Member State of the European
Union and includes an European Economic Area State;
"MiFID" means Directive 2014/65/EU of the European
Parliament and of the Council of 15 May 2014 on markets in
financial instruments and amending Directive 2002/92/EC and
Directive 2011/61/EU, as may be amended from time to time,
and includes any binding legal instruments, guidelines and
other measures that have been, or may be issued thereunder;
"Minister" means the Minister responsible for the
regulation of financial services;
"non-performing credit agreement" means a credit
agreement that is classified as a non-performing exposure in
accordance with Article 47a of the CRR;
"NPL Directive" means Directive (EU) 2021/2167 of the
European Parliament and of the Council of 24 November 2021
on credit servicers and credit purchasers and amending
Directives 2008/48/EC and 2014/17/EU, as may be amended
from time to time, and includes any binding legal instruments,
guidelines and other measures that have been, or may be issued
thereunder;
"Regulation (EU) 2017/2402" means Regulation (EU)
2017/2402 of the European Parliament and of the Council of 12
December 2017 laying down a general framework for
securitisation and creating a specific framework for simple,
transparent and standardised securitisation, and amending
Directives 2009/65/EC, 2009/138/EC and 2011/61/EU and
CREDIT SERVICERS AND CREDIT PURCHASERS
Regulations (EC) No. 1060/2009 and (EU) No. 648/2012;
"Regulation (EU) 2018/1725" means Regulation (EU)
2018/1725 of the European Parliament and of the Council of 23
October 2018 on the protection of natural persons with regard
to the processing of personal data by the Union institutions,
bodies, offices and agencies and on the free movement of such
data, and repealing Regulation (EC) No. 45/2001 and Decision
No. 1247/2002/EC, as may be amended from time to time, and
includes any binding legal instruments, guidelines and other
measures that have been, or may be issued thereunder.
(2)
For the purposes of this Act, unless the context otherwise
requires, terms used in this Act which are not defined in the said Act
shall have the same meaning as assigned to them in the NPL Directive.
(3)
In the case of conflict between the English and the Maltese
texts, the English text shall prevail in this Act and in any regulations
made thereunder.
(1)
The provisions of this Act and of any regulations
made thereunder, or Credit Servicing Rules or Conduct of Business
Rules issued thereunder shall apply to the following
(a)
credit servicers acting on behalf of a credit
purchaser in respect of a creditor’s rights under a non-
performing credit agreement, or of the non-performing credit
agreement itself, issued by a credit institution; and
(b)
credit purchasers of a creditor’s rights under a
non-performing credit agreement, or of the non-performing
credit agreement itself, issued by a credit institution.
(2)
The provisions of this Act and of any regulations made
thereunder, Credit Servicing Rules or Conduct of Business Rules
issued thereunder shall be without prejudice to any other law relating
(a)
the transfer of a creditor’s rights under a credit
agreement, or of the credit agreement itself;
(b)
the protection of consumers and borrowers’
rights, including the provisions of Regulations (EC) No. 593/
2008 and (EU) No. 1215/2012, and Directives 93/13/EEC,
2008/48/EC, 2014/17/EU as transposed in national law;
(c)
any restrictions regarding the transfer of a
creditor’s rights under a non-performing credit agreement, or of
the non-performing credit agreement itself that is not past due,
or is less than ninety (90) days past due, or is not terminated in
accordance with the applicable legislation; and
(d)
any requirements regarding the servicing of a
creditor’s rights under a credit agreement, or of the credit
agreement itself, when the credit purchaser is a securitisation
special purpose entity as defined in point (2) of Article 2 of
Regulation (EU) 2017/2402, provided that law
(i)
does not affect the level of consumer
protection provided by the NPL Directive as transposed
into national law; and
(ii)
ensures that the competent authority
receives the necessary information from credit servicers.
The provisions of this Act and of any regulations made
thereunder, of the Credit Servicing Rules or Conduct of Business
Rules issued thereunder shall not apply to the following
(a)
the servicing of a creditor’s rights under a credit
agreement, or of the credit agreement itself, carried out by
(i)
a credit institution established in the
European Union;
(ii)
an alternative investment fund manager
(AIFM) authorised or registered in accordance with
Directive 2011/61/EU, or a management company, or an
investment company authorised in accordance with
Directive 2009/65/EC provided that the investment
company has not designated a management company
under the latter Directive, on behalf of the fund it
manages; or
(iii) a non-credit institution subject to
supervision by a competent authority of a Member State
in accordance with Article 20 of Directive 2008/48/EC
or Article 35 of Directive 2014/17/EU when performing
activities in that Member State;
(b)
the servicing of a creditor’s rights under a credit
agreement, or of the credit agreement itself, that was not issued
by a credit institution except where the creditor’s rights under
the credit agreement, or the credit agreement itself, is replaced
by a credit agreement issued by such credit institution;
(c)
the purchase of a creditor’s rights under a non-
performing credit agreement, or of the non-performing credit
agreement itself, by a credit institution established in the
European Union;
(d)
the transfer of a creditor’s rights under a credit
agreement, or of the credit agreement itself transferred before
30th December 2023; and
CREDIT SERVICERS AND CREDIT PURCHASERS
(e)
the servicing of a creditor’s rights under a credit
agreement, or of the credit agreement itself, executed by public
notaries or marshals or lawyers as defined in point (a) of
Article 1(2) of Directive 98/5/EC when conducting credit
servicing activities as part of their profession.
(1)
The competent authority shall carry out its functions
under this Act and, in particular, shall ensure compliance with the
provisions of the said Act and any regulations made thereunder, with
the Credit Servicing Rules or Conduct of Business Rules issued
thereunder.
(2)
The competent authority shall also carry out the functions
and duties as competent authority for all purposes of the NPL
Directive as transposed in national law.
(3)
Without prejudice to the provisions of this article, where
Malta is the home Member State, the competent authority shall ensure
that credit servicers and, where applicable, credit service providers to
whom credit servicing activities have been outsourced in accordance
with article 12, comply with the provisions of this Act and of any
regulations made thereunder and with the Credit Servicing Rules or
Conduct of Business Rules issued thereunder, on an ongoing basis.
(4)
Without prejudice to the provisions of this article, where
Malta is the home Member State, it shall be responsible for the
supervision of the obligations set out in Article 10 and in Articles 17 to
20 of the NPL Directive, as transposed in national law, in respect of
the credit purchaser or, where applicable, its designated representative.
PART I
CREDIT SERVICERS
(1)
No legal person shall act as a credit servicer, or hold
itself to act as a credit servicer, in Malta unless it is duly authorised by
the competent authority or any European regulatory authority to act as a
credit servicer.
(2)
No legal person established in Malta shall act as a credit
servicer, or hold itself to act as a credit servicer, unless it is duly
authorised by the competent authority to act as a credit servicer under
this Act.
(3)
Where a legal person is authorised by the competent
authority to act as a credit servicer, it may receive and hold funds from
borrowers in order to transfer those funds to credit purchasers,
provided that it shall only do so in Malta and in any host Member State
that permits such receiving and holding of funds.
(4)
Where a legal person is authorised by a European regulatory
authority to act as a credit servicer, it may receive and hold funds from
borrowers in Malta in order to transfer those funds to credit
purchasers, provided that it shall only do so if the home Member State
permits such receiving and holding of funds.
(1)
A legal person established in Malta intending to act
as a credit servicer shall apply to the competent authority for
authorisation to act as a credit servicer.
(2)
An applicant shall submit to the competent authority an
application for authorisation to act as a credit servicer. An applicant
shall also provide all the information necessary for the competent
authority to verify that the applicant has satisfied all the conditions set
out in article 8.
(3)
Without prejudice to the provisions of sub-article (2), the
application referred to in the said sub-article (2) shall be accompanied
by the following
(a)
evidence of the legal status of the applicant and a
copy of its certificate of registration, and its memorandum and
articles of association;
(b)
the address of the applicant’s registered office;
(c)
the identity of the members of the applicant’s
management or administrative body and the persons who hold
qualifying holdings in accordance with point (36) of Article
4(1) of the CRR;
(d)
evidence that the applicant fulfils the conditions
laid down in article 8(b) and (c);
(e)
evidence that the persons who hold qualifying
holdings in accordance with point (36) of Article 4(1) point
(36) of the CRR fulfil the conditions laid down in article 8(d);
(f)
evidence of the governance arrangements and
internal control mechanisms referred to in article 8(e);
(g)
evidence of the policy referred to in article 8(f);
(h)
evidence of the internal procedures referred to in
article 8(g);
(i)
evidence of the procedures referred to in article
8(h);
(j)
where relevant, evidence of the existence of a
separate account in a credit institution as provided for in article
8(j);
(k)
any outsourcing agreement as referred to in
CREDIT SERVICERS AND CREDIT PURCHASERS
article 13; and
(l)
where the applicant does not intend to receive and
hold funds from borrowers as part of its business model, a
declaration to that effect.
(4)
The competent authority shall, within forty-five (45) days of
receipt of the application referred to in sub-article (2), assess whether
that application is complete by ensuring that the information and
documentation referred to in sub-article (3) have been submitted.
(5)
Where the application referred to in sub-article (2) is not
complete, the competent authority shall set a deadline by which the
applicant is to provide the missing information. If the said application
remains incomplete after the deadline referred to in this sub-article, the
competent authority may refuse to review the application and, in the
event of such refusal, shall return the submitted documents to the
applicant.
(6)
Where an application referred to in sub-article (2) is
complete, the competent authority shall immediately notify the
applicant thereof.
(7)
The competent authority shall, within ninety (90) days of
receipt of a complete application or, if the application is considered
incomplete by the competent authority, of receipt of the required
information and, or documentation, notify the applicant whether the
authorisation to act as a credit servicer is granted or refused, and
provide reasons for refusal.
(8)
In granting an authorisation under this Act, the competent
authority may subject a credit servicer to such conditions as it may
deem appropriate and, having granted such an authorisation, it may,
from time to time, vary or revoke any condition so imposed or impose
new conditions, as applicable.
(9)
A credit servicer intending to extend its business to
additional services not foreseen at the time of the granting of the
authorisation under this Act shall submit a request in writing for the
extension of its licence to the competent authority by complementing
and, or updating the information and documentation referred to in this
Act, as applicable.
(10) The competent authority shall establish and maintain a list
of all credit servicers authorised under this Act and all credit servicers
authorised in any Member State other than Malta providing services in
Malta under Article 13 of the NPL Directive. The competent authority
shall publish the said list on its official website and shall update it on a
regular basis.
The competent authority shall not grant an applicant
authorisation as a credit servicer in accordance with this Act unless it
is satisfied that
(a)
the applicant is a legal person as referred to in
Article 54 of the Treaty on the Functioning of the European
Union and its registered office is in Malta;
(b)
the members of the applicant’s management or
administrative body are of sufficiently good repute, which is
demonstrated by proving that
(i)
they have a clean police record or any
other national equivalent in relation to relevant criminal
offences, in particular those relating to property,
financial services and activities, money laundering,
usuary, fraud, tax crimes, violation of professional
secrecy or physical integrity, and also in relation to any
other offences under laws relating to companies,
bankruptcy, insolvency or consumer protection;
(ii)
the cumulative effects of minor incidents
do not impinge on their good repute;
(iii) they have always been transparent, open
and cooperative in their past business dealings with
supervisory and regulatory authorities;
(iv) they are not subject to any ongoing
insolvency procedure nor have previously been declared
bankrupt unless reinstated in accordance with the
applicable law;
(c)
the applicant’s management or administrative
body, as a whole, has adequate knowledge and experience to
conduct the business in a competent and responsible manner;
(d)
the persons who hold qualifying holdings in the
applicant within the meaning of point (36) of Article 4(1) of the
CRR are of sufficiently good repute, which is demonstrated by
fulfilling the requirements set out in paragraph (b) of this
article;
(e)
the applicant has in place robust governance
arrangements and adequate internal control mechanisms,
including risk management and accounting procedures, which
ensure respect for borrower rights and compliance with the laws
governing a creditor’s rights under a credit agreement, or the
credit agreement itself, and with the GDPR;
(f)
the applicant applies an appropriate policy
ensuring compliance with rules for the protection, and the fair
CREDIT SERVICERS AND CREDIT PURCHASERS
and diligent treatment of borrowers, including by taking into
account their financial situation and, where available, the need
for such borrowers to be referred to debt advice or social
services;
(g)
the applicant has in place adequate and specific
internal procedures that ensure the recording and handling of
complaints from borrowers;
(h)
the applicant has in place adequate anti-money
laundering and counter terrorism financing procedures where
the provisions of the Prevention of Money Laundering Act or in
any regulations made thereunder, designate credit servicers as
subject persons;
(i)
the applicant is subject, by virtue of applicable
national law, to reporting and public disclosure requirements;
and
(j)
the applicant has a separate account in a credit
institution into which all funds received from borrowers are to
be credited and kept until their channelling to the respective
credit purchaser, under the conditions agreed with the credit
purchaser
Provided that this paragraph shall not apply
where the applicant does not intend to receive and hold funds
from borrowers as part of its business model and provides the
competent authority with a declaration to that effect in
accordance with article 7(3)(l).
(1)
The competent authority may at any time suspend or
withdraw an authorisation granted to a credit servicer in accordance
with this Act where any of the following applies to such a credit
servicer
(a)
the credit servicer does not make use of the
authorisation within twelve (12) months of its grant from the
competent authority;
(b)
the credit servicer expressly renounces to the
authorisation;
(c)
the credit servicer has ceased to engage in the
activities of a credit servicer for more than twelve (12) months;
(d)
the credit servicer has acquired an authorisation
through false statements or other irregular means;
(e)
the credit servicer no longer fulfils the
requirements for the granting of such authorisation set out in
article 8; and, or
(f)
the credit servicer commits a serious infringement
of any of the provisions of this Act or any regulations made
thereunder, of Credit Servicing Rules or Conduct of Business
Rules issued thereunder, and, or any other laws regulating
consumer protection, including any applicable laws of the host
Member State or of the Member State where the credit was
granted.
(2)
Where an authorisation is withdrawn in accordance with
sub-article (1), the competent authority shall, where applicable,
immediately inform the European regulatory authority of the host
Member State in cases where the credit servicer provides services
under regulations made under this Act, and also the European
regulatory authority of the Member State where the credit was granted,
when different from the host Member State and the home Member
State.
(3)
When an authorisation is withdrawn in accordance with sub-
article (1), the competent authority shall update the list referred to in
article 7(10) without delay.
(1)
Where the competent authority proposes
(a)
to vary any condition to which the authorisation is
subject or to impose a condition thereon; or
(b)
to refuse an application for an authorisation, or
to withdraw or suspend an authorisation,
it shall give the applicant or the credit servicer, as applicable,
notice in writing of its intention to do so, setting out the reasons for the
decision it proposes to take.
(2)
Every notice given under sub-article (1), shall state that the
recipient of the notice may, within such reasonable period after the
notification thereof as may be stated in the notice, make
representations in writing to the competent authority indicating
reasons why the proposed decision should not be taken, and the
competent authority shall consider any representation so made before
reaching a final decision.
(3)
Without prejudice to the provisions of article 7(7), the
competent authority shall as soon as practicable notify its final
decision in writing to any person to whom notice is to be given in
accordance with sub-article (1).
(1)
When Malta is the home Member State, the
competent authority shall evaluate, by applying a risk-based approach,
the implementation by a credit servicer of the requirements set out in
paragraphs (e) to (h) of article 8
Provided that the competent authority shall determine the
CREDIT SERVICERS AND CREDIT PURCHASERS
extent of the evaluation referred to in this sub-article, having regard to
the size, nature and complexity of the activities of the credit servicer
concerned.
(2)
The competent authority shall inform the European
regulatory authority of the host Member State, or of the Member State
where the credit was granted, when the latter is different from the host
and the home Member State, of the results of the evaluation referred to
in sub-article (1), upon request of any one (1) of the said European
regulatory authorities, or where the competent authority considers it
appropriate. The details of any administrative penalty or other
administrative measures imposed shall be transmitted by the
competent authority to the European regulatory authority of the host
Member State and, where appropriate, of the Member State where the
credit was granted, when the latter is different from the host and the
home Member State.
(3)
When carrying out the evaluation referred to in sub-article
(1), the competent authority shall exchange information with the
European regulatory authority of the host Member State, and of the
Member State where the credit was granted, when the latter is different
from the host and the home Member State, as is necessary to enable
them to carry out their respective functions and duties laid down in the
NPL Directive.
(1)
When a credit servicer intends to receive and hold
funds on behalf of borrowers as part of its business model in
accordance with this Act, such funds shall, in accordance with the
provisions of any applicable laws, be protected in the interest of the
credit purchasers against the claims of the other creditors of the credit
servicers, in particular in the event of insolvency.
(2)
When a credit servicer intends to receive and hold funds on
behalf of borrowers as part of its business model in accordance with
this Act, and a borrower makes a payment to that credit servicer in
order to partially or totally reimburse the amounts due related to a
creditor’s rights under a non-performing credit agreement, or to the
non-performing credit agreement itself, that payment shall be deemed
to have been paid to the credit purchaser.
(3)
When a credit servicer intends to receive and hold funds on
behalf of borrowers as part of its business model in accordance with
this Act, that credit servicer shall be required to deliver a receipt or a
letter of discharge to the borrower on paper or another durable
medium, whenever the credit servicer receives funds from the
borrower, acknowledging the amounts received.
(4)
Credit service providers shall not be permitted to receive
and hold funds from borrowers.
(1)
When a credit servicer uses a credit service provider
to perform any of the credit servicing activities, the credit servicer
shall remain fully responsible for complying with all the obligations
emanating from this Act, or any regulations made thereunder, or Credit
Servicing Rules or Conduct of Business Rules issued thereunder.
(2)
The outsourcing of any credit servicing activities as referred
to in sub-article (1) shall be subject to all of the following conditions
(a)
the conclusion of a written outsourcing agreement
between the credit servicer and the credit service provider
under which the credit service provider shall be required to
comply with the applicable legal provisions, including the
provisions of this Act or any regulations made thereunder,
Credit Servicing Rules and Conduct of Business Rules issued
thereunder, and the relevant national and European Union law
applicable to a creditor’s rights under a credit agreement, or to
the credit agreement itself;
(b)
the outsourcing to a credit service provider of all
credit servicing activities at the same time is prohibited;
(c)
the contractual relationship between the credit
servicer and the credit purchaser and the obligations of the
credit servicer towards the credit purchaser or towards
borrowers is not altered by the outsourcing agreement with the
credit service provider;
(d)
the compliance of a credit servicer with the
authorisation requirements set out in article 8 is not affected by
the outsourcing of some of its credit servicing activities;
(e)
the outsourcing to the credit service provider does
not prevent the supervision of the credit servicer by the
competent authority and, where applicable, the European
regulatory authority of the host Member State and the Member
State where the credit was granted, when the latter is different
from the home Member State and the host Member State, in
accordance with Article 5 and Article 14 of the NPL Directive,
as applicable;
(f)
the credit servicer has direct access to all relevant
information concerning the credit servicing activities
outsourced to the credit service provider;
(g)
after the outsourcing agreement is terminated, the
credit servicer has the expertise and resources to be able to
provide the outsourced credit servicing activities; and
(h)
the outsourcing of credit servicing activities shall
not be undertaken in such a way as to impair the quality of the
CREDIT SERVICERS AND CREDIT PURCHASERS
credit servicer’s internal control, or the soundness or continuity
of its credit servicing activities.
(3)
Credit servicers shall inform the competent authority of the
home Member State and, where applicable, of the host Member State,
prior to outsourcing their credit servicing activities in accordance with
this article.
(4)
Credit servicers shall keep and maintain records of relevant
instructions provided to the credit service provider, in accordance with
the conditions provided for under applicable national law, and of the
outsourcing agreement referred to in this article, for a period of at least
five (5) years, but not more than ten (10) years, from the date on which
the outsourcing agreement is terminated.
(5)
Credit servicers and the credit service providers shall make
the information referred to in sub-article (4) available to the competent
authority upon request.
PART II
CREDIT PURCHASERS
(1)
Credit institutions shall provide a prospective credit
purchaser with necessary information regarding a creditor’s rights
under a non-performing credit agreement, or the non-performing credit
agreement itself, and if applicable, the collateral in order to enable the
prospective credit purchaser to conduct its own assessment of the
value of the creditor ’s rights under the non-performing credit
agreement, or of the non-performing credit agreement itself, and the
likelihood of recovery of the value of that agreement prior to entering
into a contract for the transfer of that creditor’s rights under the non-
performing credit agreement, or of the non-performing credit
agreement itself, while ensuring the protection of information made
available by the credit institution and of the confidentiality of business
data.
(2)
On a biannual basis, credit institutions that transfer to a
credit purchaser a creditor’s rights under a non-performing credit
agreement, or the non-performing credit agreement itself, shall inform
the competent authority and the European regulatory authority of the
host Member State of at least the following
(a)
the company registration number;
(b)
the legal entity identifier of the credit purchaser
or, where applicable, of its representative designated in
accordance with article 17, or where these do not exist of
(i)
the identity of the credit purchaser or of
the members of the credit purchaser’s management or
administrative body and the persons who hold qualifying
holdings in the credit purchaser within the meaning of
Article 4(1)(36) of the CRR; and
(ii)
the address and, or registered office of the
credit purchaser or, where applicable, its representative
designated in accordance with article 17;
(c)
the aggregate outstanding balance of the
creditor’s rights under the non-performing credit agreements or
of the non-performing credit agreements transferred;
(d)
the number and size of the creditor’s rights under
the non-performing credit agreements or of the non-performing
credit agreements transferred; and
(e)
whether the transfer includes the creditor’s rights
under the non-performing credit agreements, or the non-
performing credit agreements themselves, concluded with
consumers and the types of assets securing the non-performing
credit agreements, when applicable.
(3)
The authorities referred to in sub-article (2), may require
credit institutions to provide the information referred to in the said
sub-article on a quarterly basis whenever they deem necessary,
including in order to better monitor a high number of transfers that
might occur during a crisis period.
(4)
Where Malta is the host Member State, the competent
authority shall communicate without delay the information referred to
in sub-articles (2) and (3), and any other information that the
competent authority may consider to be necessary for carrying out
functions and duties in accordance with the NPL Directive, to the
competent authorities of the home Member State of the credit
purchaser.
(5)
The provisions of this article shall be applied in accordance
with the Data Protection Act and the GDPR.
(6)
Credit institutions shall use the data templates referred to in
Article 16(1) of the NPL Directive to provide information to credit
purchasers in accordance with sub-article (1) with respect to
transactions relating to credits issued on or after 1st July 2018, that
become non-performing after 28th December 2021
Provided that for credits that originate between 1st July
2018 and the date of entry into force of the implementing technical
standards referred to in Article 16(1) of the NPL Directive, credit
institutions shall complete the data template with the information
already available to them.
(7)
Without prejudice to the provisions of Article 16(1) of the
NPL Directive and sub-article (6), credit institutions shall also apply
CREDIT SERVICERS AND CREDIT PURCHASERS
the implementing technical standards referred to in Article 16(6) of the
said Directive to the transfer of a creditor’s rights under a non-
performing credit agreement, or of the non-performing credit
agreement itself, to other credit institutions, and shall use the data
templates referred to in Article 16(1) of the NPL Directive for the
provision of information between credit institutions in cases where
there is only a transfer of a creditor’s rights under a non-performing
credit agreement, or of the non-performing credit agreement itself.
(1)
A credit purchaser that is domiciled or has its
registered office in Malta shall appoint an entity as referred to in
article 4(a)(i) or (iii) or a credit servicer, to perform credit servicing
activities in respect of a creditor’s rights under a non-performing credit
agreement, or of the non-performing credit agreement itself, concluded
with consumers.
(2)
Without prejudice to the provisions of sub-article (1), when
a credit purchaser domiciled in the European Union, or that has its
registered office or, if under its national law it has no registered office,
its head office in the European Union purchases a creditor’s rights
under a non-performing credit agreement, or the non-performing credit
agreement itself, concluded with a consumer domiciled in Malta, in
addition to a creditor’s rights under any other credit agreement, or any
such other credit agreement itself, it shall appoint an entity as referred
to in article 4(a)(i) or (iii) or a credit servicer, to perform credit
servicing activities in respect of such creditors’ rights, or such credit
agreements themselves.
(3)
When a credit purchaser is not domiciled in the European
Union, or does not have its registered office, or if under its national
law it has no registered office, its head office in the European Union,
its designated representative shall appoint an entity as referred to in
article 4(a)(i) or (iii), or a credit servicer, except in cases where the
designated representative itself is an entity as referred to in article
4(a)(i) or (iii) or a credit servicer, to perform credit servicing activities
in respect of a creditor ’s rights under a non-performing credit
agreement, or of the non-performing credit agreement itself, concluded
with
(a)
natural persons,
including
consumers
and
independent workers; and, or
(b)
micro, small and medium-sized enterprises
(SMEs), as defined in Article 2 of the Annex to Commission
Recommendation 2003/361/EC
Provided that the provisions of this sub-article shall also
apply when a credit purchaser as referred to in this sub-article
purchases a creditor’s rights under a non-performing credit agreement,
or the non-performing credit agreement itself, concluded with a
consumer domiciled in Malta, in addition to a creditor’s rights under
any other credit agreement, or any such other credit agreement itself.
(4)
A credit purchaser shall not be subject to any additional
requirements for the purchase of a creditor’s rights under a non-
performing credit agreement, or of the non-performing credit
agreement itself, other than as provided for in accordance with this Act
and any regulations made thereunder, or Credit Servicing Rules and
Conduct of Business Rules issued thereunder, or by any applicable
provisions of consumer protection law, contract law, civil law or
criminal law.
(5)
The relevant European Union law and national law
concerning in particular the enforcement of contracts, consumer
protection, borrowers’ rights, credit origination, bank secrecy rules
and criminal law shall continue to apply to the credit purchaser upon
the transfer of the creditor’s rights under the credit agreement, or of
the credit agreement itself, to the credit purchaser.
(6)
Without prejudice to any national and international laws on
promissory notes and bills of exchange, the level of protection
provided under European Union law and national law to consumers
and other borrowers, as well as insolvency laws, shall not be affected
by the transfer of the creditor’s rights under the credit agreement, or of
the credit agreement itself, to the credit purchaser.
(7)
The provisions of this Act and of any regulations made
thereunder, Credit Servicing Rules and Conduct of Business Rules
issued thereunder shall be without prejudice to the power of the
competent authority and any other national authority, agency and, or
body at law to require information from credit purchasers regarding a
creditor’s rights under a credit agreement, or the credit agreement
itself, and its performance.
(8)
Credit purchasers shall be prohibited from engaging natural
persons to service the credit agreements that they have acquired.
(9)
A credit servicer or entity as referred to in article 4(a)(i) or
(iii) appointed in terms of this article shall comply, on behalf of the
credit purchaser, with the obligations imposed on the credit purchaser
under sub-articles (3) to (5) and articles 16 and 18. In cases where no
credit servicer or entity as referred to in article 4(a)(i) or (iii) is
appointed, the credit purchaser or its representative shall remain
subject to those obligations.
(10) The competent authority may require that the credit servicer
or entity as referred to in article 4(a)(i) or (iii) appointed in terms of
this article complies, on behalf of the credit purchaser, with the
obligations imposed on the credit purchaser in accordance with
national law, including this Act and any regulations made thereunder,
Credit Servicing Rules and Conduct of Business Rules issued
thereunder, and any law as referred to in sub-article (6).
CREDIT SERVICERS AND CREDIT PURCHASERS
(1)
When the credit purchaser or, where applicable, its
designated representative, appoints an entity referred to in article
4(a)(i) or (iii), or a credit servicer, to perform credit servicing activities
in relation to the transferred creditor’s rights under a non-performing
credit agreement, or the non-performing credit agreement itself, the
credit purchaser or its representative shall inform the competent
authority in writing of the identity and address of the said entity or
credit servicer, at the latest on the date on which the credit servicing
activities start.
(2)
When the credit purchaser or, where applicable, its
designated representative appoints an entity other than that notified in
accordance with sub-article (1), it shall notify the competent authority
thereof at the latest on the date of that change and shall indicate the
identity and address of the new entity that it has appointed to perform
credit servicing activities in relation to the transferred creditor’s rights
under a non-performing credit agreement or the non-performing credit
agreement itself.
(3)
When Malta is the home Member State of the credit
purchaser, the competent authority shall transmit without undue delay
to the European regulatory authority of the host Member State, to the
European regulatory authority of the Member State in which the credit
was granted, and to the European regulatory authority of the home
Member State of the new credit servicer, the information received in
accordance with sub-articles (1) and (2).
(1)
When a transfer of a creditor’s rights under a non-
performing credit agreement, or of the non-performing credit
agreement itself is concluded, a credit purchaser
(a)
that is not domiciled in a Member State; or
(b)
that does not have its registered office in a
Member State or, if under its national law it has no registered
office, its head office in a Member State, as the case may be,
shall designate in writing a representative that is domiciled in a
Member State or that has its registered office in a Member State, or if
under its national law it has no registered office, its head office in a
Member State.
(2)
The competent authority shall address the representative
referred to in sub-article (1) in addition to, or instead of, the credit
purchaser on all issues related to the ongoing compliance with this Act
and with any regulations made thereunder, and Credit Servicing Rules
and Conduct of Business Rules issued thereunder.
(3)
The representative referred to in sub-article (1) shall be fully
responsible for compliance with the obligations imposed on the credit
purchaser under this Act and under any regulations made thereunder,
and Credit Servicing Rules and Conduct of Business Rules issued
thereunder.
(1)
When Malta is the home Member State, a credit
purchaser or, where applicable, its designated representative, that
transfers a creditor’s rights under a non-performing credit agreement,
or the non-performing credit agreement itself, shall inform the
competent authority on a biannual basis of the legal entity identifier
(LEI) of the new credit purchaser and, where applicable, of its
designated representative or, where such identifier does not exist, of
(a)
the identity of the new credit purchaser or, where
applicable, its designated representative, or of the members of
the new credit purchaser’s or its representative’s management
body and the persons who hold qualifying holdings in the new
credit purchaser or its representative within the meaning of
point (36) of Article 4(1) of the CRR; and
(b)
the address of the new credit purchaser or, where
applicable, of its designated representative.
(2)
Without prejudice to the provisions of sub-article (1), where
Malta is the home Member State, the credit purchaser or its designated
representative shall inform the competent authority of at least the
following
(a)
the aggregate outstanding balance of the
creditor’s rights under the non-performing credit agreements, or
of the non-performing credit agreements transferred;
(b)
the number and size of the creditor’s rights under
the non-performing credit agreements or of the non-performing
credit agreements transferred;
(c)
whether the transfer includes a creditor’s rights
under a non-performing credit agreement, or a non-performing
credit agreement itself, concluded with consumers and the types
of assets securing the non-performing credit agreement, when
applicable.
(3)
Where Malta is the home Member State, the competent
authority may require credit purchasers or, where applicable, their
designated representative to provide the information referred to in sub-
articles (1) and (2), on a quarterly basis whenever the competent
authority deems necessary, including in order to better monitor a high
number of transfers that might occur during a crisis period.
(4)
Where Malta is the home Member State, the competent
authority shall transmit without undue delay the information received
in accordance with this article to the European regulatory authority of
the host Member State and the European regulatory authority of the
CREDIT SERVICERS AND CREDIT PURCHASERS
home Member State of the new credit purchaser.
PART III
REGULATORY AND INVESTIGATIVE POWERS
(1)
The Minister, acting on the advice of the competent
authority, may make regulations to give effect to the provisions of this
Act, and without prejudice to the generality of the foregoing may, by
such regulations, in particular, do any of the following
(a)
provide for and regulate the payment by any
person or body, as the case may be, of authorisation or other
fees and such other charges payable to the competent authority
in respect of any matter provided for, by or under this Act or
any regulations made thereunder, or Credit Servicing Rules or
Conduct of Business Rules issued thereunder, including the fees
and charges in respect of any permission, licence, authorisation,
exemption or other benefit, as well as any fees and charges in
respect of the competent authority’s regulatory, supervisory or
investigative functions under this Act and under any regulations
made, Credit Servicing Rules and Conduct of Business Rules
issued thereunder, as may be prescribed;
(b)
exempt any person, service or activity from any
one or more of the provisions of this Act, subject to such
variations, additions, adaptations and modifications as may be
prescribed and subject to such conditions or other requirements,
including other forms of authorisation and notification
procedures, as may be prescribed;
(c)
transpose, implement and give effect to the
provisions and requirements of the NPL Directive;
(d)
transpose, implement and give effect to the
provisions and requirements of European Union Directives,
European Union Regulations and any other legislative measures
of the European Union requiring transposition and, or
implementation, as they may be amended from time to time,
including any implementing measures that have been, or may
be issued thereunder and relating to authorised persons and
others as may be specified therein. Regulations made under this
paragraph, and strictly related to transpositions or
implementations as aforesaid, may provide that any provision
of this Act or of any other law shall not apply to matters falling
under such regulations, and insofar as any of the provisions of
the regulations are inconsistent with the provisions of this Act
or of any other law, such provisions in any such regulations
shall prevail;
(e)
assign powers and functions to the competent
authority for the purposes of this Act, and provide for the
exercise of such powers and the performance of such functions;
(f)
provide for the establishment and imposition of
administrative penalties and other administrative measures that
the competent authority may impose on credit servicers, credit
purchasers, designated representatives and any other persons as
may be specified therein;
(g)
prescribe that a breach of any regulations made
under this Act may amount to a criminal offence as may be
specified, and such regulations may impose punishments in
respect of any breach, consisting of a fine (multa) not exceeding
one hundred and fifty thousand euro (€150,000) or
imprisonment for a term not exceeding one (1) year or to both
such fine and imprisonment. A higher fine (multa) may be
imposed where deemed necessary or appropriate for any breach
or failure of compliance with any European Union legislation or
with any regulations made in accordance with this article to
transpose or to give effect to any European Union legislation;
(h)
prescribe anything which may be prescribed; and
(i)
provide for any matter incidental to, or connected
with any of the above.
(2)
Regulations made under this article may be made subject to
such exemptions or conditions as may be specified therein, may make
different provisions for different cases, circumstances or purposes and
may give to the competent authority such powers and, or functions of
adaptation of the regulations as may also be so specified.
(3)
Where regulations have been made in terms of this article,
the competent authority may issue Credit Servicing Rules and Conduct
of Business Rules for the better carrying out and implementation of the
provisions of any regulations made in terms of this Act.
(4)
Regulations made under this Act and any amendment or
revocation of such regulations may be published in the English
language only.
(5)
The exercise of any of the powers assigned under this article
shall be subject to any obligations or rights arising from Malta’s
international commitments.
(1)
The competent authority may, from time to time,
issue, publish, amend or revoke Credit Servicing Rules and, or
Conduct of Business Rules which shall be binding on all persons
authorised by it or falling under its regulatory or supervisory
functions, or any other persons, as may be specified therein.
(2)
Without prejudice to the generality of sub-article (1), Credit
Servicing Rules and, or Conduct of Business Rules, as applicable,
CREDIT SERVICERS AND CREDIT PURCHASERS
issued by the competent authority may
(a)
lay down additional requirements and conditions
in relation to persons authorised by it, seeking its approval, or
falling under the regulatory or supervisory functions of the
competent authority, their activities, the conduct of their
business, their relations with customers, the public and other
parties, their responsibilities to the competent authority,
reporting requirements, financial and other resources, and
related requirements, and any other matters as the competent
authority may consider appropriate;
(b)
provide for the statements and notices that shall
be made or given for any purposes in regard to which the
competent authority exercises supervisory or regulatory
functions, and the form and contents thereof;
(c)
prescribe the information that such persons are to
submit to the competent authority;
(d)
transpose, implement and give effect to the
provisions and requirements of the NPL Directive;
(e)
transpose, implement and give effect to the
provisions and requirements of European Union legislation and
any other legislative measures of the European Union requiring
transposition and, or implementation, as they may be amended
from time to time, including any implementing measures that
have been, or may be issued thereunder and relating to
authorised persons and others as may be specified therein; and,
or
(f)
regulate any matter that is incidental to, or
connected with any of the matters mentioned above as the
competent authority may consider appropriate in the
performance of its functions.
(3)
Credit Servicing Rules and Conduct of Business Rules may
be made subject to such exemptions or conditions as may be specified
t h e r e i n , m a y m a k e d i ff e r e n t p ro v i s i o n f o r d i ff e r e n t c a s e s ,
circumstances or purposes and may give to the competent authority
such powers of adaptation of the Credit Servicing Rules and, or
Conduct of Business Rules, as may also be so specified.
(1)
Without prejudice to any other powers conferred to
the competent authority by this Act or by any other law, the competent
authority may, whenever it deems necessary, give by notice in writing
such directives as it may deem appropriate in the circumstances, and
any person to whom the notice is given, shall obey, comply with and
otherwise give effect to any such directive within the time and in the
manner stated in the directive or subsequent directives
Provided that the competent authority may give any such
directive even when an authorised person, for whatever reason, ceases
to be so authorised in accordance with this Act
Provided further that any directive issued in accordance
with this article shall, unless the competent authority otherwise directs,
continue to apply even when an authorised person, for whatever
reason, ceases to be so authorised in accordance with this Act.
(2)
The power to issue directives under this article shall also
include the power to vary, alter, add to or withdraw any directive, as
well as the power to issue subsequent new directives.
(3)
Where the competent authority is satisfied that the
circumstances so warrant, it may at any time make public any directive
it has given in accordance with this article.
(1)
The competent authority may, at any time and by
notice in writing, require the persons referred to in sub-article (2) to do
all or any of the following
(a)
to furnish to the competent authority, at such time
and place and in such form as it may specify, such information
and, or documentation as it may require, including the power to
require existing telephone and data traffic records;
(b)
to furnish to the competent authority any
information and, or documentation as it may require verified in
such manner as it may specify;
(c)
to attend before the competent authority, or
before a person appointed by it, at such time and place as it may
specify, to reply to questions and provide such information and,
or documentation as it may require;
(d)
to provide the competent authority any assistance
which it may require and which that person is reasonably able
to provide.
(2)
The following persons may be required by the competent
authority to provide information, documentation and, or assistance as
specified in sub-article (1)
(a)
a credit servicer, an entity as referred to in article
4(a)(i) or (iii) appointed in terms of article 15, a credit
purchaser, a credit service provider, a designated representative
and any third party designated to perform functions in relation
to the provision of services by such persons;
(b)
the natural and, or legal persons that control any
person referred to in paragraph (a) or are controlled by such
person, both in the past and present, as well as past and present
CREDIT SERVICERS AND CREDIT PURCHASERS
directors, managers, auditors, officers and other employees of
such person, and any third party providing a service to such
person; and, or
(c)
any other person who appears to be in possession
of any relevant information.
(3)
A natural or legal person making information available to
the competent authority in accordance with this article shall not be
considered to be infringing any restriction on disclosure of information
imposed by contract or by any legislative, regulatory or administrative
provision, and shall not be subject to liability of any kind related to the
provision of such information and, or documentation.
(4)
The competent authority may make and retain copies of any
document furnished, provided or to which it has access in accordance
with this article.
(5)
Where the person required to provide information and, or
documentation under this article does not have the relevant
information and, or documentation, such person shall disclose to the
competent authority where, to the best of his knowledge, that
information and, or documentation may be available, and the
competent authority may require any person, whether indicated as
aforesaid or otherwise, who appears to the said authority to be in
possession of such information and, or documentation to provide it as
requested.
(6)
A declaration and documentation provided in accordance
with any requirement under this article may be used in evidence
against the person making the declaration or providing the
documentation as well as against any person to whom they relate.
(7)
The provisions of this article shall not apply to information
and, or documentation which is privileged in accordance with the
provisions of article 642 of the Criminal Code.
(8)
Where the competent authority has appointed a
representative in accordance with sub-article (1)(c), such person shall,
for the purposes of carrying out his functions under his appointment,
have all the powers and functions conferred on the competent
authority by this article and a requirement imposed by such person
shall be deemed to have the same force and effect as a requirement
imposed by the competent authority.
(1)
The competent authority may, whenever it deems it
necessary or expedient, appoint an inspector to investigate and report
on the affairs of any persons referred to in article 22(2).
(2)
An inspector appointed under sub-article (1)
(a)
may, if he deems it necessary or expedient for the
purposes of an investigation, investigate the affairs of any
person mentioned in sub-article (1);
(b)
shall have and may exercise all the powers
conferred on the competent authority by article 22, and any
requirement imposed by the said inspector shall be deemed to
be and have the same force and effect as a requirement imposed
by the competent authority; and
(c)
may, and if so directed by the competent authority
shall, prepare and submit interim reports and, on the conclusion
of his investigation, a final report to the competent authority.
(3)
In appointing an inspector under sub-article (1), the
competent authority may direct that the investigation shall be carried
out within such time and shall be limited to such specific or general
matters as the competent authority may deem fit.
(4)
For the purposes of this article, the inspectors may include
an advocate, a person authorised to carry out the profession of
accountant or auditor in accordance with the Accountancy Profession
Act, or a person considered by the competent authority as possessing
suitable expertise to exercise such function.
(5)
The competent authority shall have the power to order that
all expenses of, and incidental to, an investigation carried out in
accordance with this article shall be paid by the persons referred to in
sub-article (1).
(1)
Any officer, employee or agent of the competent
authority, on producing proof of his authority, if required, shall have
the power to enter any premises occupied by a person on whom a
notice has been served in terms of article 22 or whose affairs are being
investigated in terms of article 23, for the purpose of obtaining
therefrom the information or documents required by that notice, or for
the purpose of carrying out on-site inspections or investigations, and
of exercising any of the powers conferred by the said articles.
(2)
Where any officer, employee or agent of the competent
authority has cause to believe that if the notice referred to in article 22
were to be served, it would not be complied with, or that any
documents to which it may relate would be removed, tampered with or
destroyed, such officer, employee or agent shall have the power on
producing proof of his authority, if required, to enter any premises
referred to in sub-article (1) for the purpose of obtaining therefrom any
information or documents specified in the authority, being information
or documents that may have been required in accordance to such
notice as referred to in article 22.
(3)
For the purposes of any action taken in accordance with the
provisions of this article, the competent authority may request the
CREDIT SERVICERS AND CREDIT PURCHASERS
assistance of the Commissioner of Police, who may for such purpose
exercise such powers as are vested in him by law.
Without prejudice to any other power conferred upon it by
this Act or any other law, the competent authority shall have the
following powers
(a)
to grant or refuse an authorisation in accordance
with articles 7 and 8;
(b)
to withdraw or suspend an authorisation in
accordance with article 9;
(c)
to prohibit any of the credit servicing activities;
(d)
to conduct on-site and off-site inspections;
(e)
to impose administrative penalties and other
measures in accordance with article 26;
(f)
to review outsourcing agreements concluded
between credit servicers and credit service providers in
accordance with article 13;
(g)
to require credit servicers to remove any members
of their management or administrative body when they fail to
comply with the requirements set out in article 8(b);
(h)
to require credit servicers to modify or update
their internal governance arrangements and internal control
mechanisms in order to effectively ensure respect for
borrowers’ rights in accordance with the laws governing the
credit agreement;
(i)
to require credit servicers to modify or update
their policies, plans and procedures adopted to ensure the fair
and diligent treatment of borrowers, and the recording and
handling of complaints from borrowers;
(j)
to request further information pertaining to the
transfer of a creditor’s rights under the non-performing credit
agreement, or of the non-performing credit agreement itself;
and
(k)
to require a credit servicer, credit service provider
or credit purchaser or its designated representative that does not
meet any of the requirements set out in this Act or in any
regulations made thereunder, or Credit Servicing Rules or
Conduct of Business Rules issued thereunder to take, at an early
stage, all necessary actions or steps in order to comply with
those requirements.
(1)
The competent authority may impose administrative
penalties and other administrative measures as referred to in sub-
article (3) where it deems that
(a)
a person’s conduct amounts to an infringement of
any of the provisions of this Act or in any regulations made
thereunder, or Credit Servicing Rules or Conduct of Business
Rules issued thereunder;
(b)
a person has contravened or failed to comply with
any condition, obligation, requirement or directive made or
issued by the competent authority in accordance with any of the
provisions of this Act or any regulations made thereunder, or
Credit Servicing Rules or Conduct of Business Rules issued
thereunder, including failure to co-operate with an investigation
or an inspection or any request made by the competent authority
in accordance with this Act.
(2)
Without prejudice to the generality of sub-article (1), the
competent authority may impose administrative penalties and other
administrative measures as referred to in sub-article (3) where it deems
(a)
a credit servicer enters into an outsourcing
agreement infringing the provisions of article 13 or the credit
service provider to whom the credit servicing activities were
outsourced commits a serious infringement of the applicable
legal provisions, including the provisions of this Act or any
regulations made thereunder, or Credit Servicing Rules or
Conduct of Business Rules issued thereunder;
(b)
a credit servicer’s governance arrangements and
internal control mechanisms as set out in article 8(e) fail to
ensure respect for borrower rights and compliance with
personal data protection rules;
(c)
a credit servicer’s policy is inadequate for the
proper treatment of borrowers as set out in article 8(f);
(d)
a credit servicer’s internal procedures as set out in
article 8(g) fail to provide for the recording and handling of
complaints from borrowers according to the obligations set out
in this Act or in any regulations made thereunder, or Credit
Servicing Rules or Conduct of Business Rules issued thereunder;
(e)
a credit purchaser, or where applicable, its
designated representative fails to communicate the information
set out in articles 16 and 18;
(f)
a credit purchaser or, where applicable, its
designated representative fails to comply with the requirement
CREDIT SERVICERS AND CREDIT PURCHASERS
of article 15;
(g)
a credit purchaser fails to comply with the
requirements of the provisions of article 17;
(h)
a credit institution fails to communicate the
information set out in article 14;
(i)
a credit servicer allows one or more persons not
complying with the requirements set out in article 8(b) to
become or remain a member of its management or
administrative organ;
(j)
a credit servicer receives and holds funds from
borrowers when it is not authorised to do so in accordance with
this Act; and, or
(k)
a credit servicer fails to comply with the
requirements set out in article 12.
(3)
Without prejudice to any other powers conferred to it by this
Act or by any other law, the competent authority shall have the power
to impose the following administrative penalties and measures for the
infringements referred to in sub-articles (1) and (2)
(a)
to withdraw or suspend an authorisation in
accordance with article 9;
(b)
to issue an order requiring the credit servicer or
credit purchaser, or where applicable, its designated
representative to remedy the infringement, and to cease such
conduct and to desist from a repetition of said conduct; and, or
(c)
to impose an administrative penalty which may
not exceed one hundred and fifty thousand (€150,000) euro for
each infringement or failure to comply, as the case may be.
(4)
The administrative penalties and other administrative
measures taken by the competent authority in terms of this article shall
be effective, proportionate and dissuasive, and they shall be effectively
implemented.
(5)
The provisions of article 16(4) of the Malta Financial
Services Authority Act shall apply, mutatis mutandis, with respect to
any administrative penalty imposed by the competent authority in
terms of this article.
(6)
In the case of administrative penalties or other
administrative measures imposed by the competent authority in
accordance with the provisions of this Act or in any regulations made
thereunder, or Credit Servicing Rules or Conduct of Business Rules
issued thereunder, he competent authority, when determining the type
of administrative penalty or other administrative measure and, where
applicable, the amount of the administrative penalty, shall take into
account relevant circumstances, including where appropriate
(a)
the gravity and the duration of the infringement;
(b)
the degree of responsibility of the credit servicer
or credit purchaser, or where applicable, its designated
representative responsible for the infringement;
(c)
the financial strength of the credit servicer or
credit purchaser responsible for the infringement, including by
reference to the total turnover of a legal person or the annual
income of a natural person;
(d)
the importance of profits gained or losses avoided
because of the infringement by the credit servicer or credit
purchaser or, where applicable, its designated representative
responsible for the infringement, insofar as those profits or
losses can be determined;
(e)
the losses caused to third parties by the
infringement, insofar as those losses can be determined;
(f)
the level of cooperation by the credit servicer or
credit purchaser responsible for the infringement with the
competent authority;
(g)
previous infringements by the credit servicer or
credit purchaser or, where applicable, its designated
representative responsible for the infringement;
(h)
any actual or potential systemic consequences of
the infringement.
(7)
Without prejudice to the provisions of this article, where
obligations imposed in terms of this Act or any regulations made
thereunder, or Credit Servicing Rules or Conduct of Business Rules
issued thereunder apply to a legal person, in the event of an
infringement of any provision thereof, administrative penalties and
other measures may also be imposed, subject to the conditions laid
down in national law, on the members of the management or
administrative body of the legal entity concerned, and on other
individuals who are responsible for the infringement under national
law.
(8)
The imposition by the competent authority of an
administrative penalty or any other administrative measure in terms of
this article shall be without prejudice to any other consequence
emanating from the act or omission of the offender in terms of civil or
criminal law
CREDIT SERVICERS AND CREDIT PURCHASERS
Provided that in all cases where the competent authority
imposes an administrative penalty or any other administrative measure
in respect of anything done or omitted to be done by any person, and
such act or omission also constitutes a criminal offence, no
proceedings may be taken or continued against the said person in
respect of such criminal offence.
(1)
If the competent authority proposes to impose an
administrative penalty or any other measure on any person in
accordance with article 26, it shall give a notice in writing of its
intention to do so, specifying the reasons for the decision it proposes to
take.
(2)
Every notice given under sub-article (1) shall specify that
the recipient of the notice may, within such reasonable period after the
service thereof as may be stated in the notice, make representations in
writing to the competent authority specifying the reasons why the
proposed decision should not be taken, and the competent authority
shall consider any representation so made before reaching a final
decision.
(3)
The competent authority shall as soon as practicable notify
its final decision in writing to any person to whom notice is to be given
in accordance with sub-article (1).
(1)
The competent authority shall publish any decision
imposing an administrative penalty or any other measure, in
accordance with the provisions of this Act or any regulations made
thereunder, or Credit Servicing Rules or Conduct of Business Rules
issued thereunder, on its website immediately after the person subject
to that decision has been informed of that decision.
(2)
The information published in accordance with sub-article
(1) shall specify the type and nature of the breach, the identity of the
person subject to the decision and any other information which the
competent authority deems relevant.
(3)
The provisions of sub-articles (1) and (2) shall not apply to
decisions of the competent authority imposing measures that are of an
investigatory nature.
(4)
Where the competent authority deems, following a case by
case assessment, that the publication of the identity of the legal person
subject to the decision, or the identity or personal data of a natural
person would be disproportionate, or where such publication may
jeopardise an ongoing investigation, the competent authority shall
(a)
defer the publication of the decision to impose a
penalty or a measure until the moment where the reasons for
non-publication cease to exist;
(b)
publish the decision to impose a penalty or a
measure on an anonymous basis in a manner which is in
conformity with national law, where such anonymous
publication ensures an effective protection of the personal data
concerned
Provided that in this case, the publication of the
relevant data may be deferred for a reasonable period where it
is foreseen that within that period the reasons for anonymous
publication shall cease to exist;
(c)
not publish the decision to impose a penalty or
measure in the event that the options laid down in paragraphs
(a) and (b) are considered to be insufficient to ensure the
proportionality of the publication of such a decision with regard
to measures which are deemed to be of a minor nature.
(5)
Where the decision is subject to an appeal before a national
judicial, administrative or other authority, the competent authority
shall also publish immediately on its website such information and any
subsequent information on the outcome of such an appeal. Any
decision annulling a decision subject to appeal shall also be published.
(6)
Any decision that is published in accordance with this
article shall remain accessible on the website of the competent
authority for a period of at least five (5) years after its publication
Provided that personal data contained in any such decision
shall only be retained on the website of the competent authority for as
long as is necessary for the purposes of public interest and
transparency.
PART IV
APPEALS, OFFENCES AND CONFIDENTIALITY
(1)
For the purposes of this article, the Financial
Services Tribunal means the Tribunal established by article 21 of the
Malta Financial Services Authority Act.
(2)
Any person who feels aggrieved by a decision of the
competent authority in terms of this Act or any regulations made
thereunder, or Credit Servicing Rules or Conduct of Business Rules
issued, thereunder may appeal against such decision to the Tribunal
within such period and under such conditions as are laid down in
article 21 of the Malta Financial Services Authority Act.
CREDIT SERVICERS AND CREDIT PURCHASERS
(3)
Without prejudice to the provisions of sub-article (2), any
person who feels aggrieved by the competent authority’s failure to take
a decision in respect of an application for authorisation which contains
all the information required in accordance with this Act within the
time limit provided for in article 7(4), may appeal against such failure
to decide to the Tribunal within such period and under such conditions
as laid down in article 21 of the Malta Financial Services Authority
Act.
(4)
An appeal against a decision of the competent authority
shall not suspend the operation of that decision
Provided that a decision of the competent authority to
withdraw the authorisation of a credit servicer shall not become
effective until the expiration of the period within which an appeal is
filed under this article and, in the case that an appeal is filed within
such period, the decision shall become effective on the date of the
decision of the Tribunal dismissing the appeal, or on the date on which
the appeal is abandoned, whichever is the earliest.
(5)
Subject to the provisions of this article, the provisions of
article 21 of the Malta Financial Services Authority Act shall apply,
mutatis mutandis, to appeals that may be brought before the Tribunal
in accordance with this article.
(1)
Any person who
(a)
contravenes or fails to comply with any of the
provisions of articles 6(1) or (2), 21(1), 22(1), 22(5) or 31(1), or
of article 22(1) or 22(5) as applied in terms of article 23; or
(b)
contravenes or fails to comply with any
condition, obligation, requirement, directive or order made or
given in accordance with any of the provisions of this Act or in
any regulations made thereunder, or Credit Servicing Rules or
Conduct of Business Rules issued thereunder; or
(c)
for the purposes of, or in accordance with, any of
the provisions of this Act or any regulations made thereunder, or
Credit Servicing Rules or Conduct of Business Rules issued
thereunder, or any condition, obligation, requirement, directive
or order made or given as aforesaid, furnishes information or
makes a declaration which he knows to be inaccurate, false or
misleading in any material respect, or recklessly furnishes
information or makes a declaration which is inaccurate, false or
misleading in any material respect; or
(d)
with intent to avoid detection of the commission
of an offence in accordance with this Act, removes, destroys,
conceals or fraudulently alters any book, document or other
paper; or
(e)
intentionally obstructs a person exercising rights
or powers conferred by this Act or any regulations made
thereunder, or Credit Servicing Rules or Conduct of Business
Rules issued thereunder,
shall, on conviction, be liable to the punishment of imprisonment
for a term not exceeding one (1) year, or to a fine (multa) not
exceeding one hundred and fifty thousand euro (€150,000), or to both
such fine and imprisonment, unless such fine or term of imprisonment
is otherwise imposed in regulations made under the Act.
(2)
The provisions of this Act or in any regulations made
thereunder, or Credit Servicing Rules or Conduct of Business Rules
issued thereunder, shall be without prejudice to any criminal
proceedings that may be competent under any other law.
(1)
Information obtained by the competent authority or
by its officers, employees or agents, whether current or former, or by
inspectors, auditors and experts formerly or currently engaged by the
competent authority for the purposes of, or in accordance with, any of
the provisions of this Act or any regulations made thereunder, or Credit
Servicing Rules or Conduct of Business Rules issued thereunder, or in
the discharge of any functions under any of the said provisions, or by
any other person who works, or has worked for the competent
authority, or by any third party to whom the competent authority has
delegated any of its functions or powers, shall be treated as
confidential and protected by the duty of professional secrecy, and
shall not be disclosed to any other person, except in the following
cases
(a)
where the authority, body or person
communicating the information to the competent authority
consents thereto;
(b)
where the disclosure of the information is
necessary for any legal proceedings;
(c)
where the information is provided to such other
local or European or overseas regulatory, judicial or
enforcement authorities in the pursuance of serious concerns of
a regulatory or criminal nature; and, or
(d)
where the disclosure of the information is
permitted or required by law or European Union legislation.
(2)
The information referred to in sub-article (1) shall include
all information exchanged between the competent authority and
European regulatory authorities in accordance with this Act or any
regulations made thereunder, or Credit Servicing Rules or Conduct of
Business Rules issued thereunder that concerns business or operational
conditions and other economic or personal affairs.
CREDIT SERVICERS AND CREDIT PURCHASERS
The processing of personal data for the purposes of this Act,
or in any regulations made thereunder, or Credit Servicing Rules or
Conduct of Business Rules issued thereunder shall be carried out in
accordance with the Data Protection Act, GDPR and Regulation (EU)
2018/1725.
PART V
COOPERATION WITH OTHER AUTHORITIES
(1)
The competent authority shall cooperate with
European regulatory authorities whenever necessary for the purpose of
carrying out the functions and duties or of exercising the powers
assigned to the competent authority and the said European regulatory
authorities under the NPL Directive, as transposed in national law.
(2)
The competent authority shall, on request and without
undue delay, provide the European regulatory authorities referred to in
sub-article (1) with the information required for the purpose of
carrying out their functions and duties under the NPL Directive, as
transposed in national law.
(3)
When the competent authority receives any confidential
information in the exercise of its functions and duties in accordance
with this Act or any regulations made thereunder, or Credit Servicing
Rules or Conduct of Business Rules issued thereunder, the competent
authority shall only use that information in the course of the said
functions and duties. The exchange of information between the
competent authority and the other European regulatory authorities as
referred to in sub-article (1) shall be subject to the obligation of
professional secrecy referred to in Article 76 of MiFID.
(4)
The competent authority shall implement the necessary
administrative and organisational measures to facilitate the
cooperation referred to in sub-article (1).