Authorisation Process for Credit Servicing Firms  

The purpose of this section is to provide information to firms who are considering applying for authorisation as a Credit Servicing Firm. 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 Act"). 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”) amended Part V of the Act to expand the activity of credit servicing, as defined in the Act, to include holding the legal title to credit granted under a credit agreement and associated ownership activities. In 2022, the 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.

The Central Bank seeks to process each application as expeditiously as possible while meeting its obligation to operate a rigorous and effective gatekeeper function.  It aims to ensure that the application process is facilitative and accessible from the perspective of applicants and, importantly, that firms have clarity with regard to the process, its requirements and timelines.

Transitional Provisions 2022

Section 34FB(1) of the Act provides that a person carrying on the business of a Credit Servicing Firm (in so far as that business relates to “specified credit matters” or “specified hire matters”) immediately before the commencement of the 2022 Act is taken to be authorised to carry on the business of a Credit Servicing Firm until the Central Bank has granted or refused an authorisation, provided that the person applies to the Central Bank under section 30 of the Act for authorisation no later than 3 months after the commencement of the Act. Persons seeking to avail of the transitional arrangements are required to complete the following:

Authorisation Requirements and Standards for Credit Servicing Firms 

The Central Bank published its Authorisation Requirements and Standards for Credit Servicing Firms in December 2015.  The Central Bank amended these Authorisation Requirements and Standards to reflect the changes required thereto following the enactment of the 2018 Act. 

All firms seeking authorisation as a Credit Servicing Firm will be required to demonstrate to the Central Bank that they are in a position to meet each of the Authorisation Requirements and Standards prior to an authorisation being granted.  The Authorisation 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. 

Before Applying for Authorisation

In advance of submitting an application for authorisation as a Credit Servicing Firm, a firm should satisfy itself that:

  • Its proposed business model requires authorisation pursuant to the Act; 
  • It can comply with the Authorisation Requirements and Standards for Credit Servicing Firms; 
  • It is capable of complying with, and adhering to, the authorisation requirements and on-going supervisory requirements that must be satisfied on an on-going basis; and
  • It has read the Guidance Notes on Completion of an Application for Authorisation as a Credit Servicing Firm, and has taken the information provided therein into consideration when completing the Application form for Authorisation as a Credit Servicing Firm.

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 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 (including the specific information/documentation requirements set out therein;
  2. Programme of Operations; and
  3. A Business Plan.

Please refer to the Guidance Note entitled ‘Guidance Note on Completing an Application for Authorisation as a Credit Servicing Firm under Part V of the Central Bank Act, 1997 (as amended)’ for guidance in relation to completing the Application Form.

Once an application is submitted the applicant will also need to ensure that all relevant individuals proposed to hold a Pre-Approved Controlled Function (“PCF”) role (typically board members, senior management, key function holders) and any qualifying shareholders complete Fitness and Probity Individual Questionnaires – more information here. Individual Questionnaires must be submitted electronically via the returns service on the Central Bank of Ireland Portal by all relevant individuals, but qualifying shareholders (that are not proposed PCF role holders) are required to submit a paper version. Please note that access to the online Individual Questionnaire only becomes available after an application has been deemed to contain all the key information needed to progress to the assessment phase of the application process.

Applications that do not contain all of the key authorisation documentation listed above or that contain documentation that is materially incomplete will be returned to the applicant.

The completed Application Form, along with all relevant accompanying material, should be submitted in electronic format to the Central Bank by email to [email protected].

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.