Featured Product

    EBA Consults on Guidelines for Loan Origination and Monitoring in EU

    June 19, 2019

    EBA launched a consultation on the guidelines on loan origination and monitoring in EU. The draft guidelines specify the internal governance arrangements for granting and monitoring of credit facilities throughout their life cycle. These guidelines apply to the risk management practices, policies, processes, and procedures for loan origination and for monitoring of performing exposures, along with their integration into the overall management and risk management framework. The consultation runs until September 30, 2019 and the guidelines will apply from June 30, 2020.

    The draft guidelines represent the first instance in which the EBA is proposing requirements that apply to providers of consumer credit under the Consumer Credit Directive and to non-bank mortgage credit providers under the Mortgage Credit Directive, also known as MCD. This amended scope of action is the result of the EC's review of the three ESAs, which is estimated to come into effect in January 2020 and will see the Consumer Credit Directive to be added to the EBA scope. These draft guidelines introduce requirements for borrowers' creditworthiness assessment and bring together the prudential and consumer protection objectives of EBA. Debt securities are excluded from the scope of application of these guidelines.

    These guidelines build on the existing national experiences, addressing shortcomings in the institutions' credit granting policies and practices, as highlighted by the recent financial crisis. The guidelines also reflect recent supervisory priorities and policy developments related to credit granting. They account for the need to consider, in credit granting, environmental, social, and governance factors, anti-money laundering and counter-terrorist financing, and technology-based innovation. The draft guidelines aim to ensure that institutions have robust and prudent standards for credit risk taking, management and monitoring, and that newly originated loans are of high credit quality. The draft guidelines also aim to ensure that the institutions' practices are aligned with consumer protection rules and anti-money laundering requirements. 

    The draft guidelines are envisaged to replace the existing EBA guidelines on creditworthiness assessments under the Mortgage Credit Directive, which the EBA issued in June 2015 and which will be repealed with the effect from the date of application on the guidelines on loan origination and monitoring.

     

    Related Links

    Comment Due Date: September 30, 2019

    Effective Date: June 30, 2020

    Keywords: Europe, EU, Banking, Loan Origination, Internal Governance, Credit Risk, Mortgage Credit Directive, Guidelines, EBA

    Related Articles
    News

    APRA Publishes Proposal to Increase Transparency of Banking Data

    APRA proposed to substantially increase the volume and breadth of data it makes publicly available on authorized deposit-taking institutions, including banks, credit unions, and building societies.

    December 05, 2019 WebPage Regulatory News
    News

    EC Amends Rule on Mapping of External Credit Assessment Institutions

    EC published the implementing regulation (EU) 2019/2028, which amends Regulation 2016/1799, regarding the mapping tables specifying correspondence between the credit risk assessments of external credit assessment institutions (ECAIs) and the credit quality steps set out in the Capital Requirements Regulation.

    December 04, 2019 WebPage Regulatory News
    News

    EBA Issues Second Part of Advice on Implementation of Basel III in EU

    EBA published the second part of its advice on the implementation of Basel III in EU, which complements the report published on August 05, 2019.

    December 04, 2019 WebPage Regulatory News
    News

    EU Approves European Council Proposal on CCP Recovery and Resolution

    EU ambassadors approved the position of European Council on a proposed framework for clearing houses and their authorities to prepare for and deal with financial difficulties.

    December 04, 2019 WebPage Regulatory News
    News

    EIOPA Consults on Approach for Regulating Key Aspects of PEPP

    EIOPA launched a consultation on the proposed approaches and considerations for its technical advice and its implementing and regulatory technical standards, as mandated by the Pan-European Personal Pension Product (PEPP) Regulation.

    December 02, 2019 WebPage Regulatory News
    News

    ESMA Issues Guidance for Registration of Securitization Repositories

    ESMA published a guidance note on the process for registering securitization repositories under the Securitization Regulation.

    December 02, 2019 WebPage Regulatory News
    News

    European Council Appoints New Commission With Effect from December 01

    European Council appointed the new Commission for the period from December 01, 2019 to October 31, 2024.

    December 02, 2019 WebPage Regulatory News
    News

    BoE Governor Appointed as UN Envoy for Climate Action and Finance

    BoE Governor Mark Carney has been appointed as the United Nations (UN) Special Envoy for Climate Action and Finance.

    December 01, 2019 WebPage Regulatory News
    News

    PRA Publishes Annual List of G-SIIs and O-SIIs

    PRA released the annual list of UK firms designated as other systemically important institutions (O-SIIs), along with the 2019 list of UK-headquartered global systemically important institutions (G-SIIs).

    November 29, 2019 WebPage Regulatory News
    News

    EBA Publishes Report on Risks and Vulnerabilities in EU Banking Sector

    EBA published its annual report on risks and vulnerabilities in the EU banking sector.

    November 29, 2019 WebPage Regulatory News
    RESULTS 1 - 10 OF 4250