Implementation of non-performing loans directive in the Netherlands

Briefing

Introduction

On 18 July 2025, the Dutch Implementation Act on Credit Servicers and Credit Purchasers (Implementatiewet richtlijn kredietservicers en kredietkopers) (the Implementation Act) entered into force, implementing the EU Credit Servicers Directive (Directive (EU) 2021/2167) (the Directive) into Dutch law. The Implementation Act introduces a licensing regime for credit servicers and notification requirements for credit purchasers, with the aim of strengthening the internal market for non-performing loans (NPLs). For these purposes, a loan agreement is considered non-performing when either repayment is more than 90 days overdue or if it is considered unlikely that the borrower will meet its obligations without the enforcement of collateral.

The Directive’s goals are to: (1) support the development of a well-functioning secondary NPL market across the EU; (2) reduce NPL volumes on bank balance sheets; and (3) ensure borrower protection. In pursuit of those aims, the Implementation Act introduces changes for those involved in transactions with NPL components.

In this article, we:

provide a high-level overview of the legal framework prior to the Implementation Act
examine changes made to the Dutch legal framework as a result of the Implementation Act
highlight the practical and strategic implications for lenders and sponsors operating in the Dutch market
briefly discuss the possible impact on relevant Loan Market Association (LMA) documentation.

The position prior to the Implementation Act

Prior to the Implementation Act, the Netherlands had no dedicated legal framework for the transfer or servicing of NPLs. The transfer of receivables (including NPLs) was governed by general civil law principles of the Dutch Civil Code (Burgerlijk Wetboek), in particular via assignment (cessie), contract takeover (contractsoverneming) or transfer under general title (overgang onder algemene titel), such as legal demerger (juridische splitsing).

There was also no applicable licensing requirement for entities acquiring or servicing loans, including consumer credit, as long as they did not extend new credit or hold client funds. This allowed non-bank investors such as debt funds and sponsors to purchase and enforce loans without the need to involve a licensed servicer, unless the activity fell within the scope of specific regulatory regimes. These included, for instance, the (now repealed) Consumer Credit Act (Wet op het consumentenkrediet) and the Dutch Financial Supervision Act (Wft), particularly in cases involving deposit-taking institutions.

Borrower protection was largely governed by general principles of contract law and case law. The Dutch courts have generally taken a lenient view toward assignees of NPLs. The Dutch Supreme Court has ruled that the assignment of receivables does not, by itself, alter the underlying legal relationship with the debtor, including any duty of care obligations, provided the debtor has been duly notified of the assignment. This case law has long been cited to support the permissibility of third-party enforcement of assigned debts in the absence of a dedicated regulatory regime. In line with this, Dutch courts have consistently upheld the right of investors to collect the assigned receivables and to enforce related security, so long as they respect the relevant contractual terms and procedural safeguards.

Changes introduced by the Implementation Act

The Dutch Implementation Act introduces several changes to the legal framework for acquiring and servicing NPLs through assignment or contract takeover under Dutch law. Transfer under general title appears to be outside of the scope of the Implementation Act.

New licensing requirement

One of the most significant changes introduced by the Implementation Act is the establishment of a new licensing regime for entities that service NPLs on behalf of credit purchasers. Under the new regime, any party that manages an NPL and performs at least one servicing activity (such as collecting payments, renegotiating loan terms, handling complaints, or providing borrower notifications) will require a licence from the Dutch Authority for the Financial Markets (the AFM). It is important to note that servicing an NPL for a credit institution (ie a bank) does not trigger the licensing requirement. Licensed servicers will benefit from a European passport, allowing them to operate across the EU after notification to the competent authorities in the host Member State.

Credit servicers and credit purchasers

The Implementation Act clarifies the distinction between credit purchasers and credit servicers. A credit purchaser, which may be a private equity fund or other sponsor, does not require a licence so long as it appoints a licensed credit servicer to manage the loan. However, if a purchaser intends to service the loan directly, it must apply for a licence. In any case, purchasers of NPLs involving consumers or small and medium-sized enterprises must appoint a licensed credit servicer, a bank, or an authorised lender to manage the loans. Purchasers established outside the EU must additionally appoint a representative and a qualified servicer within the Union.

New conduct of business rules

The Implementation Act also introduces new conduct of business requirements for both credit servicers and credit purchasers. These include obligations to ensure respectful, transparent, and non-intimidating communication with borrowers, as well as information duties during and following the transfer of NPLs. Where a credit servicer handles borrower payments on behalf of a purchaser, those funds must be held in segregated accounts to protect borrowers in the event of insolvency.

AFM as supervisory authority

The AFM is designated as the competent supervisory authority responsible for licensing, oversight, and enforcement. To strengthen enforcement capabilities, the Implementation Act also amends the Dutch Economic Offences Act (Wet op de economische delicten) to make unauthorised NPL servicing a criminal offence, punishable by fines or imprisonment. The AFM will further act as intermediary for international supervisory cooperation under the EU passporting regime.

Key implementation choices

In implementing the Directive, the Netherlands has made use of two 'member state options'. First, lawyers, notaries and bailiffs are excluded from the scope of the Implementation Act where servicing is incidental to their professional duties. Second, licensed servicers are permitted to hold borrower funds on behalf of credit purchasers, provided appropriate safeguards are in place.

Practical implications for lenders and sponsors

The Implementation Act has practical implications for lenders, sponsors, and market participants in banking and finance transactions. For banks, no new licensing requirement applies, as they are excluded from the scope of the directive. However, banks selling NPL portfolios must comply with new disclosure obligations, including the provision of standardised information to potential purchasers. Furthermore, the Implementation Act allows mortgage loans to be transferred without informing the borrower, provided the original lender continues to manage the loan.

For sponsors and investors such as private equity firms acquiring NPL portfolios, the new regime introduces operational and compliance requirements. While these sponsors do not need a licence if they outsource servicing to a licensed party, they are nonetheless subject to certain notification and reporting obligations vis-à-vis the AFM. These include semi-annual disclosures regarding transferred portfolios, identification of appointed servicers, and borrower communications. Where servicing is performed in-house, sponsors must obtain a licence and adhere to the applicable conduct and operational standards.

The Implementation Act also requires both servicers and purchasers to formalise their servicing arrangements contractually. Compliance teams should ensure that due diligence processes in loan sales address regulatory qualification, servicing obligations and risk allocation in light of the new requirements.

LMA documentation

Although the LMA attempted to exclude syndicated lending from the scope of the Directive, the Implementation Act may have some implications for LMA-based finance documentation. In particular, parties should assess whether the transfer of NPLs triggers the requirement to appoint a licensed credit servicer, especially where a transferee is not itself authorised. While standard LMA transfer mechanics remain available, Dutch law governed facility and transfer documents may need to be amended to address compliance with the new regime (such as by including representations, covenants or conditions precedent regarding servicer appointment and regulatory status). This is particularly relevant in enforcement or restructuring scenarios where the debt becomes non-performing and is transferred to a non-bank investor.

Market outlook and strategic considerations

Beyond the immediate compliance requirements, the Implementation Act may influence transaction structuring and market dynamics in the medium term. For example, the licensing passport could facilitate cross-border servicing platforms, allowing sponsors to centralise servicing operations across multiple EU jurisdictions. Equally, the stricter borrower communication and reporting standards may increase operational costs for smaller market participants, encouraging further consolidation in the NPL servicing market. Lenders should also be aware that, in stressed-asset situations, early identification of potential NPL classification could be key to preserving transfer flexibility and avoiding delays in enforcement. Sponsors, particularly those investing in mixed-jurisdiction portfolios, may wish to align servicing agreements with the most restrictive local regime to minimise friction in future portfolio sales or refinancing transactions. In light of the broader market outlook discussed above, participants should also monitor how cross-border passporting, operational consolidation, and jurisdictional alignment may affect future NPL strategies.

Conclusion

While the Implementation Act introduces a formal regulatory framework for the servicing and acquisition of NPLs, its practical impact on the Dutch banking and finance market is expected to be relatively limited. Many of the requirements under the Implementation Act (eg the appointment of a servicer for consumer-facing NPLs, borrower communication standards, and basic disclosure obligations) are already common practice in the market. For most lenders, sponsors and other market participants, the changes will mainly involve operational refinements and documentation updates, rather than a fundamental shift in transactions. In addition, the Implementation Act does not interfere with the existing legal mechanics for transferring receivables under Dutch law, nor does it impose licensing requirements on investors who outsource servicing.