1. Introduction
In recent years, the Belgian Parliament has codified substantial parts of Belgian economic legislation into a new Code of Economic Law (“Wetboek van economisch recht” / “Code du droit economique”). The Code of Economic Law consists of 18 Books, including one on payment and credit services (“Boek VII. – Betalings- en kredietdiensten” / “Livre VII. – Services de paiement et de crédit”, “Book VII”).
Book VII regulates payment services and credit to consumers and mainly implements the following European legislation into Belgian law:
(a) Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC (“Directive 2007/64/EC”);
(b) Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC;
(c) Regulation (EC) No 924/2009 of the European Parliament and of the Council of 16 September 2009 on cross-border payments in the Community and repealing Regulation (EC) No 2560/2001;
(d) Commission Directive 2011/90/EU of 14 November 2011 amending Part II of Annex I to Directive 2008/48/EC of the European Parliament and of the Council providing additional assumptions for the calculation of the annual percentage rate of charge; and
(e) Regulation (EU) No 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in Euro and amending Regulation (EC) No 924/2009.
One large part of Book VII, mainly concerning payments services, entered into force on 29 May 2014 and another large part, mainly concerning credits to consumers, entered into force on 1 April 2015.
From 1 November 2015 (the initial date of entry into force, 1 July 2015, has been changed into 1 November 2015), the remainder of Book VII, which mainly deals with the licence requirements for providers of credit to consumers, will enter into force. As a result, the providers of credit to consumers and intermediaries must take action to remain authorised to provide credit to consumers or to act as an intermediary in Belgium. The type of action such creditors and intermediaries must take is discussed in Section 4 (Grandfathering rules in respect of new rules and procedures on licences and registrations (deadline: 30 April 2017)) below.
First, we will outline the structure of Book VII in Section 2 (Book VII (payment and credit services) - structure).
2. Book VII (Payment and Credit Services) - Structure
Book VII is divided into 7 Titles, each of which is briefly described below. In addition, the following parts of the Belgian Economic Code should also be taken into account regarding payment and credit services:
(a) Book I (Definitions) of the Belgian Economic Code, Title 1 (General definitions) and Title 2, Chapter 5 (Definitions applicable to book VII.), which, together, contain the definitions related to payment and credit services;
(b) Book VI (Market practices and consumer protection) of the Belgian Economic Code, which applies, in general, to contracts entered into with consumers; and
(c) Book XV (Law enforcement) of the Belgian Economic Code, which sets out several measures to detect breaches of the Belgian Economic Code, imposes and also provides certain administrative and criminal sanctions on breaching certain provisions concerning payment and credit services.
2.1 Title 1 – General principles
Title 1 is an introductory title and explains which European legislation has been implemented in Book VII.
2.2 Title 2 - Scope
Title 2 sets out Book VII’s scope, stating that it applies to:
(a) payment services; and
(b) consumer credit.
2.3 Title 3 – Payment services
Title 3 of Book VII restates, with certain, slight modifications (taking into account Regulation (EU) No 260/2012), the Act of 10 December 2009 on payment services, which partly implements Directive 2007/64/EC. The Act of 24 March 2003, which introduced a basic banking service, has been modified significantly, to take into account, among other things, the Commission Recommendation 2011/442/EU of 18 July 2011 on access to a basic payment account, and it has been restated as such in a modified form in a separate Chapter in Title 3 of Book VII.
2.4 Title 4 – Credit agreements
Title 4 of Book VII applies to credit agreements (to be) entered into with consumers and contains four Chapters. A distinction must be made between:
(a) credit agreements entered into with consumers in relation to immovable property and secured by a mortgage (“Residential Mortgage Credit”); and
(b) credit agreements entered into with consumers other than Residential Mortgage Credit (“Consumer Credit”).
Chapter 1 applies to Consumer Credit and restates the Act of 12 June 1991 on consumer credit, but it also introduces certain new provisions to regulate Consumer Credit further. These new provisions mainly relate to the promotion and granting of Consumer Credit.
Chapter 2 applies to Residential Mortgage Credit and restates, with only minor modifications, the Act of 4 August 1992 relating to mortgage credit. The implementation of Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and Regulation (EU) No 1093/2010 in Belgium will require certain changes to this Chapter.
Chapter 3 sets out the rules on the Central Individual Credit Register (“Centrale voor Kredieten aan Particulieren” / “Centrale des Crédits aux Particuliers”). The Central Individual Credit Register records information about both Residential Mortgage Credits and Consumer Credits, including payment defaults, and must, in most cases, be consulted by Creditors before the granting of a Residential Mortgage Credit or a Consumer Credit.
Chapters 1, 2 and 3 entered into force on 1 April 2015.
Chapter 4 sets out the authorisation conditions that must be fulfilled for a provider (“Creditor”) of or an intermediary (“Intermediary”) in Residential Mortgage Credit and/or Consumer Credit in Belgium.
Each Creditor active in Belgium must be licensed by or registered with the Belgian Financial Services and Markets Authority (the “FSMA”). It should be noted, however, that, in principle, certain regulated Creditors governed by the laws of another Member State which are allowed to be active as a Creditor in Residential Mortgage Credit and/or Consumer Credit in such Member State may also be active in Belgium in relation to Residential Mortgage Credit and/or Consumer Credit without being licensed by the FSMA on the basis of the right of establishment or the freedom to provide services (so a passporting regime is available for certain regulated Creditors located in a Member State). These regulated Creditors governed by the laws of another Member State must submit their standard form contracts to the Federal Public Service Economy for approval.
Each Intermediary active in Belgium must be registered in a FSMA-held register. However, certain Intermediaries in Residential Mortgage Credit registered in an equivalent register with the competent authority in their home Member State are exempted from this requirement as they benefit from a passporting regime.
Chapter 4 will enter into force on 1 November 2015 and, to allow Creditors and Intermediaries time to comply with the new authorisation procedures and rules set out in Chapter 4, there is a transitional period during which Creditors and Intermediaries should obtain the necessary licences or registrations (please see Section 4 (Grandfathering rules in respect of new rules and procedures on licences and registrations (deadline: 30 April 2017)) below).
2.5 Title 5 –Sanctions
A breach of certain provisions of Book VII by a payment services provider, a Creditor or an Intermediary may result in certain administrative, penal and/or civil sanctions. Certain civil sanction are listed in title 5 of Book VII.
2.6 Title 6 – Out-of-court dispute resolution mechanisms
Title 6 of Book VII provides for the creation of an independent out-of-court dispute resolution mechanism.
2.7 Title 7 – Final provisions
Title 7 of Book VII restates certain general technical rules on how new Belgian Royal Decrees must be adopted when implementing Book VII.
3. Detection of Infringements of Book VII
Book XV of the Code of Economic Law grants particular civil servants certain special powers to detect infringements that may arise under Book VII (for example, through “mystery shopping”) and sets out the FSMA’s competences regarding its supervisory duties in relation to Book VII, Title 4, Chapter 4.
4. Grandfathering rules in respect of new rules and procedures on licences and registrations (deadline: 30 April 2017)
4.1 Creditors
Those Creditors that are already authorised by the FSMA (Residential Mortgage Credit) and/or by the Federal Public Service Economy (Consumer Credit) may continue to provide Residential Mortgage Credit and/or Consumer Credit respectively. This authorisation is on the condition that they obtain a final licence from the FSMA within an 18 month-period starting from 1 November 2015 (so, by the latest, 30 April 2017). Such final licence is not required for certain regulated Creditors governed by the laws of another Member State which are already registered under the old Belgian laws on Residential Mortgage Credit and/or Consumer Credit, provided that they submit their standard form contracts to the Federal Public Service Economy within an 18 month-period starting from 1 November 2015 (so, by the latest, 30 April 2017).
4.2 Intermediaries
Intermediaries in Consumer Credit who have already been registered with the Federal Public Service Economy and all Intermediaries in Residential Mortgage Credit (the latter Intermediaries were not subject to specific licence or registration requirements to act as an Intermediary for Residential Mortgage Credit), may continue to intermediate concerning Consumer Credit or Residential Mortgage Credit respectively, provided that they (i) were active as an Intermediary for more than 1 year prior to 1 November 2015 and (ii) obtain a final registration with the FSMA within an 18 month-period, starting from 1 November 2015 (so, by the latest, 30 April 2017).
Authors:
Johan De Bruycker Kasper Van Landeghem Wim Legrand johan.debruycker@altius.com kasper.vanlandeghem@altius.com wim.legrand@altius.com
