Credit servicers

Business scope

Credit servicers are entities licensed by Banca d'Italia under Article 114.6 of the Italian Consolidated Law on Banking (TUB) and registered under Article 114.5 of the TUB. Under Italy's transposition of Directive (EU) 2021/2167 (Secondary Market Directive, SMD), credit servicers are authorized to manage only bad loans on behalf of credit purchasers.

For the purposes of servicer operations, bad loans are defined as non-performing loans granted by banks and other entities authorized to grant such loans and classified as ‘bad’ in accordance with Banca d'Italia's provisions (i.e. exposures to debtors who are insolvent or in substantially similar circumstances).

Credit purchasers are natural or legal persons, other than banks, who acquire bad loans as part of their business or professional activities.

Credit servicing includes the following:

  • collecting and recovering debts from the debtor (servicing), the process of which must be carried out, at least in part, within Italy;
  • renegotiating contractual terms and conditions with the debtor in accordance with the instructions from the credit purchaser, provided that this does not constitute a lending activity within the meaning of Article 106 of the TUB. For those purposes, early repayments and deferrals shall not constitute lending activities; nor shall the activities conducted by credit intermediaries;
  • handling debtor complaints regarding credit purchasers, credit servicers or any entity to which the corporate functions for the management of bad loans are outsourced;
  • notifying the debtor of any changes in interest rates and charges or of any payments due.

In addition, credit servicers may provide the following:

  • the management of loans purchased outright and on their own behalf from banks or other financial intermediaries, provided that this activity is ancillary to the management of bad loans on behalf of third-party purchasers;
  • the out-of-court debt recovery, other than bad loans;
  • the servicing of bad loans in the context of securitization transactions under Law 130/1999, provided such transactions do not fall within the scope of Regulation (EU) 2017/2402 (i.e. no risk segmentation);
  • related or ancillary services.

In addition to the servicers licensed under Article 114.6 of the TUB, bad loans may also be managed by the following entities without prior authorization: banks; intermediaries under Article 106 of the TUB; and asset managers under Article 1(1)(q-bis) of Legislative Decree 58/1998 (on behalf of the undertakings for collective investment they manage, for loans granted or purchased by such undertakings).

The new provisions introduced by Directive (EU) 2021/2167 (the Secondary Market Directive, SMD) apply solely to the management of loans granted by banks and other entities authorized to grant loans and classified as ‘bad loans’ (see Article 114.1(1)(a) and (b) of the TUB) and solely to those transactions conducted after Banca d’Italia’s supervisory provisions for credit servicing (only in Italian) came into force on 8 March 2025.

Therefore, under the current provisions, entities authorized to recover debt out of court within the meaning of Article 115 of Royal Decree 773/1931 may operate without prior authorization referred to under Article 114.6 of Banca d’Italia’s TUB in order to carry out and/or continue to carry out the following:

  1. the management of receivables other than bad loans;
  2. the management of portfolios of bad loans purchased before Banca d'Italia's supervisory provisions (only in Italian) came into force on 8 March 2025;
  3. the out-of-court recovery of bad loans carried out, on the basis of an agreement to outsource corporate functions, on behalf of (i) asset managers, as defined in Article 1(1)(q-bis) of Legislative Decree 58/1998; (ii) banks; (iii) financial intermediaries registered under Article 106 of the TUB, in accordance with Article 2(6) of Law 130/1999; and (iv) credit servicers licensed in accordance with Article 114.6 of the TUB.

The regulatory framework for credit servicing is harmonized at the European level.

Once licensed in Italy, servicers may - subject to prior notification to Banca d'Italia - provide their services in other EU Member States, either through the establishment of a branch or under the freedom to provide services, within the scope of the provisions implementing the SMD in force in the EU Member State where they intend to provide their services. Furthermore, they may conduct their business in a third country outside the EU (with or without establishing a branch), subject to authorization from Banca d'Italia.

Requirements

Applicants to be licensed must meet the following requirements:

  1. take the legal form of a joint-stock company, a limited joint-stock partnership, a limited liability company or a cooperative;
  2. have their registered office and headquarters in Italy, where at least a part of the debt must be collected and recovered from the debtor of loans under management;
  3. limit their corporate purpose to the management of bad loans and the out-of-court recovery of receivables other than bad loans, without prejudice to the possibility of providing related or ancillary services;
  4. ensure that qualified shareholders meet the requirements of good repute and comply with the criteria of propriety, in accordance with Article 114.13(1) and (3) of the TUB;
  5. ensure that corporate officers meet the fit and proper requirements and comply with the criteria of integrity and competence, in accordance with Article 114.13(2) of the TUB;
  6. adopt measures to protect the debtor's funds in accordance with Article 114.7 of the TUB in the case of funds received from debtors of loans under management. Servicers that do not intend to receive or hold such funds shall indicate this in their licensing application.

Applicants are required to submit specific documents, in compliance with Banca d'Italia's provisions, including their memorandum and articles of association, a business plan detailing their start-up operations and organizational structure, corporate governance arrangements, administrative and accounting organization and internal controls, as well as policies and procedures for ensuring compliance with the applicable provisions on the protection of debtors, including those for handling complaints (see the Legal framework and FAQ sections). Applicants are encouraged to submit the relevant template for financial statement data (only in Italian) which the supervisory authority needs to identify the relevant information for its assessment of the application.

The application must be submitted to Banca d'Italia using the procedures described in the licensing webpage.

Banca d'Italia shall reject applications where, based on the aforementioned requirements assessment, the applicant fails to comply with the applicable legal provisions, including those concerning the protection of debtors.

Post-licensing requirements

Once licensed, credit servicers are required to submit to Banca d'Italia a certificate showing the date of registration in the business register (for newly incorporated entities) or of amendments to their articles of association (for existing entities). As of that date, licensed servicers will be registered by Banca d'Italia pursuant to Article 114.5 of the TUB and notified of their identification number.

Once registered, financial intermediaries are required to:

  • join an alternative dispute resolution system under Article 128-bis of the TUB;
  • notify Banca d'Italia of the start date of their operations within 12 months of registration;
  • notify Banca d'Italia of any changes to the information included in the register, within 10 days of filing those changes in the business register.

Intermediaries are supervised by Banca d'Italia in accordance with the organizational criteria published on its website and are subject to the supervisory powers set forth in the statutory provisions.

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