Czech Republic Update: The Twilight of Debt Collectors? New Regulation About to Introduce Stricter Rules

A new regulation of the so-called non-performing loans, i.e. loans that are not being properly repaid, has been adopted. Act No. 84/2024 on „the market in non-performing loans“ conforms to European regulation and aims to establish clearer rules for trading in non-performing loans and, to some extent, to strengthen the protection of the debtors.

Under the new regulation, business on the non-performing loan market is no longer covered by the general  trading licence. It receives its own regulation, which makes the possibility of providing these services subject to a licence issued by the CNB (Czech National Bank). The CNB will also register all persons who obtained such authorisation in a publicly accessible electronic catalogue.

In order to obtain the licence, legal requirements must be met, including, inter alia, fulfilling the standard of trustworthiness by the provider, an appropriate amount of expertise of the members of the company’s bodies and transparency of the origin of the provider‘s financial resources. 

The provision of non-performing loan services without a licence is grounds for a fine of up to CZK 1 000 000. However, if you are currently engaged in business in this field (and are not a bank or similar institution), your existing authorisation will allow you to continue to do so until 29 June 2024 and, if applicable, during the pendency of your application beyond that date.

By Konečná & Zacha law firm, Lithuania, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact centraleurope@transatlanticlaw.com

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