Authorisation Process for Credit Servicing Firms and Credit Servicers  

The purpose of this section is to provide information to firms who are considering applying for authorisation as a Credit Servicing Firm and/or Credit Servicer. The Central Bank of Ireland (“the Central Bank") is the competent authority in Ireland for the authorisation and supervision of Credit Servicing Firms under Part V of the Central Bank Act, 1997 (as amended)(“the 1997 Act") and the European Union (Credit Servicers and Credit Purchasers) Regulations 2023 (“2023 Regulations”). 

Credit Servicing Firms

Part V of the Act was amended by the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 (“the 2015 Act”) to introduce a regulatory regime for Credit Servicing Firms, bringing such firms within the Central Bank’s regulatory remit, and the activity of credit servicing became a regulated activity in Ireland. 

The Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 (“the 2018 Act”) was enacted on 24 December 2018 and commenced on 21 January 2019, amended Part V of the 1997 Act to expand the activity of credit servicing, to include holding the legal title to credit granted under a credit agreement and associated ownership activities.

In 2022, the 1997 Act was further amended by the Consumer Protection (Regulation of Retail Credit and Credit Servicing Firms) Act 2022 (“the 2022 Act”), meaning that credit servicing now includes other activities such as consumer-hire and hire-purchase. 

Authorisation Requirements and Standards for Credit Servicing Firms 

The Central Bank has published Authorisation Requirements and Standards for Credit Servicing Firms (“Requirements and Standards”), which applicants, seeking authorisation as a Credit Servicing Firm, must satisfy in order to be granted an authorisation and which must be complied with thereafter on an on-going basis All applicants seeking authorisation as a Credit Servicing Firm are required to demonstrate to the Central Bank that they are in a position to meet each of the Requirements and Standards prior to an authorisation being granted. The Requirements and Standards are imposed on all Credit Servicing Firms as a condition of authorisation and must be complied with on an on-going basis.

Please note that if a Credit Servicing Firm applicant is unable to demonstrate to the Central Bank that it cannot fulfil the identified Requirements and Standards on an on-going basis, the Central Bank will be unable to grant authorisation to the Credit Servicing Firm applicant.

Credit Servicers

Directive (EU) 2021/2167 on credit servicers and credit purchasers (“the Directive”) was enacted by the European Parliament and EU Council on 24 November 2021 and was transposed into Irish law via 2023 Regulations effective from 30 December 2023.

The 2023 Regulations does not impose a direct obligation on the part of a purchasers to obtain authorisation; rather, the 2023 Regulations require the relevant servicers to be authorised.

Additionally, the 2023 Regulations stipulate that a credit servicers who is authorisation in one EU Member State will be permitted to exercise passport rights and provide those services on a cross-border basis into another EU Member State.

Before Applying for Authorisation

In advance of submitting an application for authorisation as a Credit Servicing Firm and/or Credit Servicer (as applicable), a firm should satisfy itself that:

  • Its proposed business model requires authorisation pursuant to the 1997 Act and/or 2023 Regulations (as applicable); 
  • It can comply with the Authorisation Requirements and Standards for Credit Servicing Firms (as applicable); 
  • It is capable of complying with, and adhering to, the authorisation requirements and standards and on-going supervisory requirements that must be satisfied on an on-going basis (as applicable); and
  • It has read the Guidance Notes on Completion of an Application for Authorisation as a Credit Servicing Firm and/or Credit Servicers, and has taken the information provided therein into consideration when completing the Application form for Authorisation as a Credit Servicing Firm/and or Credit Servicer.
  • It has read the Central Bank’s cross sectoral guidance on expectations for applicants seeking authorisation.

Firms are advised to seek legal advice if in any doubt about whether their activities fall within the scope of the legislation or compliance with authorisation requirements. If, having received and considered such advice, firms have any doubt about their status, they are advised to submit an application for authorisation.

Summary of the Key Steps in the Application Process

  • The applicant submits a completed Application Form with supporting documentation;
  • The Central Bank acknowledges receipt of the application submission;
  • The Central Bank assesses whether the application submission contains the key information and documentation required;
  • Where all key information and documentation has been provided, the Central Bank completes an assessment of the application submission and may issue detailed comments and/or seek additional information;
  • The Central Bank assesses whether IQs have been submitted;
  • The applicant is provided with the opportunity to address the comments and requests issued by the Central Bank in a revised application submission(s);
  • The Central Bank will assess the subsequent application submission(s) and notify the applicant of its assessment and next steps. The applicant is provided with a further opportunity to address any concerns arising at this stage in the process (if any); and
  • The Central Bank will notify the applicant of its decision in respect of the application submission.

Application Documentation to Make an Application for Authorisation

Applicants seeking authorisation under the Act should submit the following documentation, which should be fully completed:

  1.  Application Form for Authorisation as a Credit Servicing Firm and/or Credit Servicer (including the specific information/documentation requirements set out therein;

Applicants are advised to read our Guidance Note prior to submitting an application:

Key Stages in the Application Process

Stage 1 - Acknowledgement

The Central Bank will acknowledge receipt of an application for authorisation submitted by the applicant within 3 working days of receipt.

Stage 2 - Key Information Check

The Central Bank will then check that the application material submitted contains all the key information and documentation required to proceed to the submission of IQs. Within 10 working days of receipt of the application, the Central Bank will either:

  1.  Advise the applicant that the application contains sufficient material to proceed to the Assessment Phase; or
  2. Advise the applicant that the application does not contain sufficient material to proceed to the Assessment Phase. A statement of the omitted information is also provided to assist the applicant should it wish to submit another application in the future. Any subsequent application will be considered a new application and the application process commences again.

Stage 3 - Submission of IQs

Where the application proceeds to the Assessment Phase, as outlined in Stage 2(I) above, the application will proceed to the submission of IQs. The applicant will be required to register on the Central Bank of Ireland Portal and required to complete and submit all required IQs.  

Stage 4 - Assessment Phase

In the Assessment Phase, the application material submitted will be reviewed against the relevant authorisation requirements to determine whether sufficient information has been provided to enable the Central Bank to issue a 'Notification of Assessment' letter as referred to in Stage 5 below. The Central Bank will issue initial comments to the applicant based on its review of the application material submitted and any subsequent comments based on its review of responses submitted by the applicant. The Central Bank has published service standards (see below) in respect of the processing of applications for authorisation and in the context of meeting those standards the service standard timeframe to which the Central Bank has committed for the Assessment Phase of the application process is 90 working days. However, it should be noted that in the event of further and/or subsequent information being sought, this 90 day 'clock' is paused until such information is received by the Central Bank from the applicant.

The Service Standards do not apply to transitional applications. The Service Standards also do not apply to applications (a) where another regulatory authority has to be contacted, (b) which are subject to interview, (c) where significant legal issues arise, (d) where significant fitness and probity issues arise, (e) where the business model of an applicant is complex or novel in nature, (f) where significant changes to the business model, the applicant’s shareholder structure or other key aspects of an application arise during the review process, or where the application becomes dormant, and (g) where the Bank is minded to refuse an application. The time taken by an applicant to address matters raised by the Bank during the authorisation process is excluded from the Service Standards. Applications that remain dormant with no positive engagement from an applicant are returned.

Assessment and/or specific interviews will also be conducted in respect of applications where specific fitness and probity related concerns arise.

Stage 5 - Notification of Assessment

The Central Bank will notify the applicant of the outcome of the Assessment Phase of the application process as follows:

a) Where the assessment is favourable, the Central Bank will notify the applicant by letter that it proposes to authorise the applicant on the basis of the information provided in its application submission, provided any specified final steps are taken and/or specified final items of information and evidence are received. This letter will also specify any specific conditions the Central Bank proposes to impose on the authorisation itself once granted. This letter will explain the reasons for these proposed conditions and the applicant will be afforded the opportunity to make representations in respect of the proposed conditions before the Central Bank makes any decision on the application.

b) In the event that the Central Bank is not satisfied on foot of the Assessment Phase such that it can issue a Notification of Assessment letter under (a) above, the Central Bank will advise the applicant of this by letter. The letter will set out the areas to be addressed and afford the applicant the opportunity to do so and to make any submissions it wishes to the Central Bank in respect of these matters.

Stage 6 - Notification of Decision in respect of the Application

Once the Central Bank has assessed any further information/evidence/representations submitted by the applicant following on from Stage 5 above, the Central Bank will notify the applicant, via letter, of its decision on the application as follows:

  • Authorisation - The Central Bank has decided to grant an authorisation.
  • Authorisation with Specific Conditions - The Central Bank has decided to grant an authorisation with specific conditions attached to the authorisation. The specific conditions to be attached to the authorisation will be outlined in the letter.
  • Proposed Refusal of Authorisation - The Central Bank is minded to refuse the application for authorisation. In accordance with the applicable legislation, the Central Bank will notify the applicant of the grounds for the proposed refusal of the authorisation. The applicant will then have an opportunity to make submissions in response to the proposed refusal. The submissions will then be considered by the Central Bank following which a decision will be taken by the Central Bank to grant or refuse the authorisation applied for, as appropriate. View details of the Central Bank's process for the refusal of an application for authorisation.

Optional Pre-Application Meeting

The Central Bank offers the facility of an optional pre-application meeting to firms to answer specific questions about any aspect of the application process and completing the Application Form. Please note that the Central Bank recommends that firms who wish to avail of this facility have reviewed the application material in full before requesting such a meeting and have their specific questions prepared in advance in order to make the meeting as productive as possible. Such meetings will typically be no longer than one hour.