Recent Changes in Belgian Law | KPMG | BE

Recent Changes in Belgian Law on Consumer Credit and Residential Mortgage Credit

Recent Changes in Belgian Law

The Belgian Parliament has codified substantial parts of the Belgian economic legislation into a new Code of Economic Law (“Wetboek van economisch recht” / “Code du droit economique”). This Code of Economic Law consists of 18 Books, including book VII on payment and credit services (“Boek VII. – Betalings- en kredietdiensten” / “Livre VII. – Services de paiement et de crédit”).

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The Belgian Parliament has codified substantial parts of the Belgian economic legislation into a new Code of Economic Law (“Wetboek van economisch recht” / “Code du droit economique”). This Code of Economic Law consists of 18 Books, including book VII on payment and credit services (“Boek VII. – Betalings- en kredietdiensten” / “Livre VII. – Services de paiement et de crédit”).

Book VII mainly implements European legislation into Belgian law: 

The part of Book VII on payments services entered into force on 29 May 2014 and the part concerning credits to consumers and residential mortgage credit, entered into force on 1 April 2015. 

From 1 November 2015 the remainder of Book VII, which mainly deals with the licensing requirements for providers of credit to consumers and intermediaries, will enter into force. This was postponed from 1 July 2015, when it was originally supposed to enter into force.

As a result, the providers of credit to consumers and intermediaries must take action to remain authorized to provide credit to consumers or to act as an intermediary in Belgium. 

Authorized creditors and  intermediaries

Those creditors that are already authorized by the Belgian Financial Services and Markets Authority (the “FSMA”) (Residential Mortgage Credit) and/or by the Federal Public Service Economy (the “FPS”) (Consumer Credit) may continue to provide Residential Mortgage Credit and/or Consumer Credit respectively. This authorization is on the condition that they obtain a final license from the FSMA within an 18 month-period starting from 1 November 2015 (so, by the latest, 30 April 2017). 

As part of the licensing procedure with the FSMA, the creditors will have to submit their consumer credit agreements approved by FPS to the FSMA. Therefore, the creditors will have to undertake a prior submission of their consumer credit agreements (including all security documents and any general terms and conditions, to the extent applicable) to the FPS for approval. In this respect, it is important to note that the FPS pays particular attention to the compliance of those documents with the provisions of Book VII, including amongst others, the clauses on data protection, clauses on early termination of the credit agreement, the necessity to include restrictions on the enforcement of guarantees and other security interests.

The obligation to obtain such a final license is not required for certain regulated creditors. The exemption applies to creditors that are governed by the laws of another Member State and already registered under the ‘old’ Belgian laws on Residential Mortgage Credit and/or Consumer Credit. This is providing that they submit their standard form contracts to the FPS within an 18 month-period starting from 1 November 2015 (so, by the latest, 30 April 2017). 

Intermediaries in Consumer Credit, which were already registered with the FPS and all Intermediaries in Residential Mortgage Credit, may continue to intermediate concerning Consumer Credit or Residential Mortgage Credit respectively. This is allowed only if they were active as an Intermediary for more than 1 year prior to 1 November 2015 and obtain a final registration with the FSMA within an 18 month-period, starting from 1 November 2015 (so, by the latest, 30 April 2017).

New creditors and intermediaries

Any new creditor active in Belgium must be licensed by or registered with the Belgian Financial Services and Markets Authority (the “FSMA”). However, it should be noted that in principle certain regulated creditors that are governed by the laws of another Member State may also be active in Belgium in relation to Residential Mortgage Credit and/or Consumer Credit without being licensed by the FSMA on the basis of the right of establishment or the freedom to provide services. To be eligible the creditor must be authorized as a creditor in Residential Mortgage Credit and/or Consumer Credit in said Member State. 

These regulated creditors governed by the laws of another Member State must however still submit their standard form contracts to the FPS for approval.

Each new intermediary active in Belgium must be registered in a FSMA-held register. However, certain Intermediaries in Residential Mortgage Credit registered in an equivalent register with the competent authority in their home Member State will be exempted from this requirement as they benefit from a passporting regime.

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