Last week, we promised you to start a series of short articles on regulation in consulting practice on the blog . The first part will be devoted to Act No. 257/2016 Coll., on Consumer Credit (hereinafter referred to as the Consumer Credit Act) with a focus on the top element of the entire regulation – supervision.
Currently, the supervision of the provision and intermediation of consumer loans is divided between the CNB (which supervises banking institutions – providers) and the CTIA (which supervises non-bank providers and intermediaries).
On the day when the ZoSÚ, i.e. 1. 12. 2016, supervision is transferred only to the CNB. It will supervise both banks and non-bank providers, as well as distributors – intermediaries.
It will receive complaints and suggestions from consumers, investigate them and, of course, impose sanctions in the event of misconduct. And in order to have someone to control and sanction, it will administer and operate a public register in electronic form. The principle will be the same as it already exists in the field of investments.
The CNB will enter the following in the register:
– non-bank providers of consumer credit,
– independent intermediaries,
– tied agents,
– tied consumer credit intermediaries, and
– foreign intermediaries.
An independent intermediary must apply for authorisation to operate and, if the CNB complies, it will be entered in the register. The CNB will register the tied agent in the register on the basis of a notification submitted by the represented person – an independent intermediary (e.g. Broker Trust).
The CNB may withdraw the authorisation to operate the Fire Brigade under the conditions laid down by law and may inform the public thereof in an appropriate manner. Before the authorisation is withdrawn, the CNB still has administrative proceedings and sanctions at its disposal. The law defines a number of administrative offences (Sections 153 – 157), but in principle there are three amounts of fines:
– up to CZK 5,000,000
– up to CZK 10,000,000
– up to CZK 20,000,000
Providers and intermediaries will need to demonstrate expertise and skills to carry out their activities. They will prove this professional competence by successfully passing professional examinations that will be provided for the CNB by an accredited body. The CNB will also assign accreditation to organise professional examinations aimed at demonstrating the professional knowledge and skills of intermediaries and providers, and at the same time it will publish these accredited persons in a list and prepare a set of questions and tests for them.
The conditions for obtaining professional competence will be specified by a government decree, which is currently in the comment procedure. We will discuss the test parameters in more detail later in the section focused on tied agents (VZs), i.e. end intermediaries.
In the next part, we will focus on providers – banks.