The European Commission has issued a call to Cyprus and 11 other EU member states to fully transpose the Directive on credit servicers and credit purchasers into national law. This directive aims to standardise operations for credit purchasers and servicers across the EU, ensuring borrower rights are protected. Cyprus, along with Belgium, Bulgaria, Spain, Italy, Lithuania, Hungary, the Netherlands, Austria, Poland, Portugal, and Finland, must address this compliance issue within two months or face potential referral to the Court of Justice of the European Union.
Background and Significance
The Directive 2021/2167 is pivotal in facilitating a cohesive operational environment for credit purchasers and servicers throughout the EU. It mandates these entities to act with fairness and professionalism, ensuring that borrowers are not subjected to harassment or undue influence. The harmonisation of these rules is essential for maintaining a stable financial environment and safeguarding consumer rights.
Infringement Procedures and Compliance
The European Commission’s infringement procedures include sending letters of formal notice to member states that fail to comply with EU legislation. This recent notice to Cyprus and the other 11 states is part of a broader package addressing various compliance issues across the EU. Should the states fail to meet the requirements within the specified timeframe, the Commission may escalate the matter, potentially leading to judicial proceedings and fines.
Broader Implications
This call for harmonisation extends beyond credit purchasers. The Commission has also addressed non-compliance in areas such as the Bank Recovery and Resolution Directive and waste collection and recycling targets, highlighting ongoing challenges in achieving uniform regulatory standards across the EU. For Cyprus, aligning with these directives is crucial not only for legal compliance but also for maintaining investor confidence and fostering a stable economic environment.
