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20 June 2019

EBA consults on draft Guidelines on loan origination and monitoring


Learning from the elevated levels of non-performing exposures (NPEs) across the EU in recent years, the draft guidelines aim to ensure that institutions have robust and prudent standards for credit risk taking, management and monitoring, and that newly originated loans are of high credit quality.

The draft Guidelines also aim to ensure that the institutions' practices are aligned with consumer protection rules and AML requirements.

The draft Guidelines specify the internal governance arrangements for granting and monitoring of credit facilities throughout their lifecycle. They introduce requirements for borrowers' creditworthiness assessment and bring together the EBA's prudential and consumer protection objectives.

The EBA has developed these Guidelines building on the existing national experiences, addressing shortcomings in the institutions' credit granting policies and practices highlighted by the recent financial crisis. At the same time, these Guidelines reflect recent supervisory priorities and policy developments related to credit granting. Particularly, they account for the need to consider in credit granting environmental, social and governance factors, anti-money laundering and counter-terrorist financing, as well as technology-based innovation.

The draft Guidelines represent the first instance in which the EBA is proposing requirements that apply to providers of consumer credit under the Consumer Credit Directive (CCD) and to non-bank mortgage credit providers under the Mortgage Credit Directive (MCD). This amended scope of action is the result of the EU Commission's review of the three European Supervisory Authorities, which is estimated to come into effect in January 2020 and will see the Consumer Credit Directive (CCD) to be added to the EBA's scope.

Responses to this consultation can be sent to the EBA by 30 September 2019. A public hearing will take place at the EBA premises in Paris on 20 September 2019 from 10:00 to 13:00 CEST.

Press release

Consultation paper



© EBA


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