On May 2, 2024, the new Act No. 84/2024 Coll., on the market with non-performing loans (hereinafter referred to as the "Act") came into force. The market of non-performing loans becomes a regulated market and its managers become regulated entities.
The performance of the activity "management of non-performing loans" is now subject to obtaining an activity permit granted by the Czech National Bank (ČNB). At the same time, the law affects not only standard "collection activities", namely the collection or recovery of a due debt from a non-performing loan, but also some related activities, e.g.: a) negotiations on changing the content of the obligation from the non-performing loan agreement, b) handling complaints and claims of the borrower related to a non-performing loan, or c) informing the borrower about a change in the interest rate or payment related to a non-performing loan or about a debt due from a non-performing loan. Managers of investment funds and legal advice (lawyer, notary services) are exempt from the scope of the Act.
At the same time, this regulated activity can only be performed by entities defined by the Act. In addition to banks, savings and credit unions, non-bank providers of consumer loans, under the conditions set by the law governing consumer loans. The law distinguishes between a servicer and a non-performing loan dealer, which it defines as a person to whom non-performing loans are transferred in the course of its business. The scope of the Act does not fall on the transfer of a non-performing loan if the person to whom the non-performing loan was transferred is a bank, savings and credit cooperative, foreign bank or other specified entities.
Obtaining a permit for the activity of a non-performing loan manager is, among other things, conditional on setting up a suitable administration and management system, incl. internal control system, rules for compliance with obligations related to the fight against the legalization of criminal proceeds and terrorist financing, rules for dealing with the debtor. The requirements of the Act are essentially comparable to the license of a non-bank consumer credit provider.