Consumer credit providers and peer-to-peer loan brokers
Registering as a consumer credit provider and peer-to-peer loan broker
The Act on the Registration of Certain Credit Providers and Credit Intermediaries, by which supervisory responsibility was transferred to the Financial Supervisory Authority (FIN-FSA), entered into force on 1 July 2023.
The Act applies to traders who provide consumer credits within the scope of chapter 7 or chapter 7a of the Consumer Protection Act. The Act also applies to traders who broker loans to consumers, where the loan is provided by a lender other than one referred to in chapter 7 or chapter 7a of the Consumer Protection Act (peer-to-peer loan).
In addition, the new Act applies to traders who provide loans to housing corporations or other housing associations (housing association loan).
Only registered entities are permitted to provide consumer credits and housing association loans and to broker peer-to-peer loans.
The FIN-FSA has prepared forms to facilitate the submission and processing of applications for entities applying for registration. Entities already registered with the Regional State Administrative Agency for Southern Finland do not need to re-apply for authorisation after the change of supervisor; their registrations will be transferred as they are.
Key requirements for the content of the register notification
The registration notification must include:
- Information of the party making the notification
- Information about the nature of the activities
- Description of the practised activities
- A statement on the fitness and propriety of the party making the notification and on their knowledge of credit activities
- Information on the keeping and handling of client funds.
Under the law, the entity must also notify the FIN-FSA immediately of changes to the information entered in the register and of the termination of activities.
Progress of the registration procedure in the FIN-FSA
After receiving the register notification, the FIN-FSA assesses whether the entity fulfils the statutory requirements, and issues a decision on the case. If the application is incomplete, the FIN-FSA will ask for further clarification before deciding on the case. The quality and completeness of the notification will influence significantly the total processing time.
Practice of the activity may be prohibited under penalty of a conditional fine if the obligation register is not complied with.
A registration fee is charged for registration.
Regulations and guidelines 3/2023
Regulations and guidelines 3/2023 bring together the FIN-FSA’s regulations, guidelines, recommendations and interpretations on the information to be included in the register notification for credit providers and peer-to-peer loan brokers. Their purpose is to provide guidance on market entry and to streamline the registration process.
Regulations and guidelines 3/2023 highlight the factors to which the FIN-FSA, when interpreting the requirements laid down in the law, pays particular attention when it assesses whether the party submitting the registration notification meets the requirements set for certain consumer credit providers or peer-to-peer loan brokers. The requirements for registration must be fulfilled throughout the period of activity.
- Regulations and guidelines 3/2023 - Registration of Certain Credit Providers and Credit Intermediaries (in Finnish)
Registers and lists
Information on the supervised entities of the FIN-FSA is collected in the list of supervised entities. The list contains information on, for example, the authorisation or other justification for activities.
Subareas of supervision
In addition to supervising the information in the register notification, the FIN-FSA also supervises other subareas. These include the management of insolvency risks in consumer credit, the maximum LTC ratio, compliance with obligations to prevent money laundering and terrorist financing, and the conduct of entities in their relationship with customers.
- FIN-FSA event “How are consumer credit providers supervised?” at the Bank of Finland Museum on 30 May 2023: Recording and presentation material of the event on the Bank of Finland Museum website (in Finnish)