New legislative proposal: The Swedish Act on Certain Consumer Credit Operations to be repealed

On 7 May 2024, the Government submitted a proposal for new legislation in the area of consumer credit (link). The Government's proposal means that the Act (2014:275) on Certain Consumer Credit Operations (Sw. lagen (2014:297) om viss verksamhet med konsumentkrediter) will be repealed and companies that currently have a license under the act will therefore have to apply for a license under the Swedish Banking and Financing Business Act (Sw. lagen (2004:297) om bank- och finansieringsrörelse), either as a bank or credit market company, in order to continue to provide or mediate consumer credits in Sweden.

The amendments are proposed to enter into force on 1 July 2025 and companies that are currently licensed as consumer credit institutions may continue to operate until the end of July 2026. If such a company has applied for a license under the Swedish Banking and Financing Business Act before the end of July 2026, the company may continue to conduct business until the application has been finally examined.

The proposal does not cover credits granted in connection with the sale of goods and services or credits granted or brokered under other legislation, such as mortgages or credits linked to payment services.

If the proposal becomes reality, it will have far-reaching consequences for the nearly 70 companies that are currently licensed as consumer credit institutions. Applying for a license as a bank or credit market company places great demands on resources in the form of internal organisation, capital and financially strong owners.

If you want to know more about the new bill and what it means for your business, do not hesitate to contact the undersigned.