site.btaParliament Approves on First Reading Legislative Measures Concerning Non-Performing Loans

On Friday, the National Assembly approved on first reading a bill concerning credit servicers and credit purchasers. The draft legislation received 119 votes in favor, 26 against, and 27 abstentions.

The legislative initiative comes from the Council of Ministers. In April, the Parliamentary Budget and Finance Committee also supported the bill.

According to the explanatory notes, the proposed measures aim to address the high levels of non-performing loans (NPLs) by developing a stable secondary market that allows credit institutions to offload surplus NPLs. The bill also aims to create better conditions for the cross-border transfer of non-performing loan claims, as well as to ensure high levels of protection for borrowers.

The bill regulates only out-of-court servicing of non-performing claims on bank loans, as this is an area where national regimes differ and where there is currently no specific and harmonized supervisory or legal framework among EU member states. The bill does not cover judicial proceedings governed by current Bulgarian legislation, including enforcement procedures as outlined in the Civil Procedure Code.