An interim report was submitted on 24 October on the transposition of the new Consumer Credit Directive in Sweden. The Inquiry proposes a completely new Consumer Credit Act, which will therefore replace the current Act from 2010, as well as a broader scope for the Mortgage Business Act.
The broadening of lagen om verksamhet med bostadskrediter (“LVB”) [the Mortgage Business Act] means that activities involving consumer credit other than mortgages will also being included. Accordingly, the repeal of the existing lagen om viss verksamhet med konsumentkrediter (“LVK”) [Act on certain consumer credit-related operations] is proposed. No licence in accordance with the LVB will be required for credit and payment institutions. Invoice credits are also exempt under certain conditions. The conditions for obtaining a licence under the new LVB for activities involving consumer credit other than mortgages will mainly correspond to what currently applies in accordance with LVK.
There is some uncertainty as to how the Inquiry’s proposal relates to the Government’s previous proposal to repeal LVK and instead issue a requirement that business activities involving consumer loans must only be carried on by institutions licensed under the Banking and Financing Business Act. The Inquiry touches on this and notes that even if LVK is repealed in the manner proposed by the Government, that does not include operators that certainly grant loans to consumers, though not as their main activity. In accordance with the underlying Consumer Credit Directive, in the Inquiry’s view these operators also require a licence because the Consumer Credit Directive establishes a requirement for commercial regulation of all operators granting loans under the Consumer Credit Act (with a few exceptions for payment respites and invoice credits). That means a clear expansion of the area for which a licence is required because operators who, for example, have offered payment in instalments for sales of their goods and services, i.e. as a subordinate part of their activities, may need to apply for a licence.
The expansion of the area for which a licence is required will affect most companies, particularly companies that have been able to offer loans outside the current area for which a licence is required. These companies are mainly suppliers of goods and services in the trade sector. The inquiry mentions the possible effect on those companies in its impact assessment, but notes that it is difficult to assess due to a lack of statistics. The reason for this is considered to be, among other things, that many companies offering loans that would be subject to the requirement for a licence do so through collaborations with financial companies and it is not possible to assess, on the basis of available information, whether those suppliers of goods and services meet the requirements to be considered credit intermediaries. Each relevant cooperation agreement would need to be reviewed in order to carry out that assessment.
According to information from the Swedish Trade Federation and the Confederation of Swedish Enterprise, almost 90 per cent of loans in which suppliers of goods and services act as intermediaries for financial companies are vehicle loans. It is proposed that the new Consumer Credit Act should not apply to rental or leasing agreements unless the consumer has an obligation or an opportunity to acquire the goods rented or leased under the agreement. Certain changes are proposed in relation to marketing, supply of information and credit checks.
It is proposed that the changes in the Consumer Credit Act should enter into force on 20 November 2026. It is proposed that companies already holding a licence under LVK should not need to apply for a licence under the new Mortgage Business Act. It is proposed that operators that are currently permitted to grant loans or act as intermediaries for loans without a licence should be able to carry on their activities up to 20 November 2027 without any need for a licence.
The interim report is available here.
