09.10.2024 – 11:30
Federal Association of German Debt Collection Companies BDIU
Berlin (ots)
After the application deadline for permission under the Secondary Credit Market Act has expired, one thing is certain: only a good two dozen debt collection companies have tried to do so. What the BDIU had predicted has happened: instead of more competition in the market for non-performing loans (NPL), there is now less. It is not the supply side that has been strengthened, but rather the buyer side that has consolidated.
The notices have been sent. The approval process as a credit service provider according to the rules of the Federal Financial Supervisory Authority (BaFin), as part of the new regulations introduced by the Secondary Credit Market Act, has been completed. The result is disappointing: With just twenty companies, only a fraction of the BDIU members worked their way through the highly complex approval process: “The number of BDIU member companies that were active on the secondary market has more than halved,” says association managing director Dennis Stratmann specifically. “That was a failure with an announcement.”
Stratmann is referring to the BDIU’s statement, which was forwarded to the responsible Federal Ministry of Finance during the legislative process. In it, the debt collection association warned of the high bureaucratic hurdles and, based on a member survey, had already predicted that the NPL secondary market would not open up, but would rather shrink. According to Stratmann, the smaller debt collection companies in particular have withdrawn from the business because of the high level of bureaucratic effort. The proportion of companies active on the secondary market fell from originally around twelve percent to just under five percent. “Well-intentioned is the opposite of well-done,” says BDIU managing director Stratmann, taking stock.
The BDIU in no way denies the usefulness of a Europe-wide harmonization of the access requirements for credit services or the intended opening of the NPL secondary market. The growth forecast by the European banking supervisory authority EBA is just under five percent (from 38 to 39.8 billion euros); The data from the Federal Association for Credit Purchasing and Servicing eV (BKS) in the current NPL barometer would also look very similar (40.2 billion euros). The BDIU therefore welcomed the aim of the EU initiative. It is disappointing that the implementation into German law did not follow the recommendations of the industry involved. “Now we have more bureaucracy and less market,” says Stratmann, summarizing the criticism from business and associations. That is the opposite of what should be achieved. The association is convinced that the solution to this problem is obvious and was already clearly formulated in the 2021 statement: “Strengthening the secondary market for non-performing bank loans primarily involves reducing bureaucracy for existing market participants and reducing market access barriers for new ones ahead of competitors.”
background
Since the European financial and debt crisis, non-performing loans have become a destabilizing factor in some European countries. They had accumulated and, on the one hand, weakened the profitability of the institutions concerned and thus also their ability to grant loans. A functioning secondary market for non-performing loans should therefore reduce the stability risk for banks, promote the availability of new loans and thus have a positive effect on European economic growth.
The EU Commission therefore decided on the “Action Plan for Reducing Non-Performing Loans in Europe”. The central element of the plan aims to develop and improve the functioning of NPL secondary markets. In particular, the market should be opened up to investors in order, on the one hand, to stabilize the banks and their lending and, on the other hand, to provide new impetus for growth in the financial industry. To this end, a new legal framework should be created that applies across the EU and regulates market access for credit service providers. This opening of the market should then ensure more competition and higher achievable prices on the secondary market.
According to BaFin’s corporate database, the number of licenses granted for credit services in the secondary market is low. Just twenty companies are now listed there. However, among the BDIU members alone, around thirty companies have withdrawn from this market as a result of the new law. The debt collection association’s forecast during the hearings in the legislative process has been confirmed.
About the BDIU
Since 1956, the BDIU has pooled the interests of the debt collection industry towards the public, politics and business. The association has around 450 member companies (around 70 percent of debt collection service providers in Germany). They represent the interests of over half a million clients from all sectors of the economy.
The approximately 15,000 employees of the BDIU companies return a good five billion euros from more than 33 million claims into the economic cycle every year. In 80 percent of cases, they provide clarification through their professional legal services, thereby significantly relieving the burden on both companies and the judiciary.
The BDIU is the largest debt collection association in Europe and number two worldwide. As a member of the European umbrella organization FENCA (Federation of European National Collection Associations) and as a partner of the US association ACA International, BDIU members have access to a global network of several thousand debt collection service providers.
Press contact:
BDIU Federal Association of German Debt Collection Companies
Jens Kellersmann
[email protected]
+49 155 602 849 70
Original content from: Federal Association of German Debt Collection Companies BDIU, transmitted by news aktuell
