The Consumer Rights Protection Centre (CRPC) strongly opposes the proposal to transfer the supervision of consumer (non‑bank) lending to the Bank of Latvia as of 2027. CRPC believes that such a solution would not improve consumer protection; instead, it would create serious risks to the protection of consumer rights, increase state expenditure and fragment the supervision system.
From a consumer protection perspective, consumer (non‑bank) lending is a high‑risk sector, and any weakening of supervision would most severely affect consumers experiencing financial difficulties, households with low financial literacy and socially vulnerable groups.
The informative report does not identify any consumer protection problem that CRPC would be unable to address.
Unlike the division of supervision between the Bank of Latvia, CRPC and the State Revenue Service (SRS) in other areas, there is no duplication in the field of consumer rights protection. CRPC is the only authority responsible for supervising compliance with consumer rights across the entire financial sector and is currently actively involved in the implementation of Directive (EU) 2023/2225 (CCD2) on consumer credit agreements, where strengthening consumer protection is identified as a priority.
The supervision publicly referenced by the Ministry of Finance and the Bank of Latvia, and currently carried out by the latter in respect of the entities it supervises, is limited solely to licensing and anti‑money laundering (AML) matters.
If supervision of the Consumer Rights Protection Law, the Unfair Commercial Practices Prohibition Law and the Advertising Law were divided between two institutions, inconsistent application of legal norms would be inevitable.
For 20 years, CRPC has ensured:
- a unified, structured supervision model aligned with the public interest;
- a full spectrum of financial services supervision, including banks, consumer lenders (licensed and unlicensed), payment service providers, insurers and intermediaries, out‑of‑court debt recovery service providers, virtual currency service providers, and others;
- the maximum possible uniform application of consumer protection rules across all financial services.
CRPC has a comprehensive, cross‑sectoral view of consumer problems in its day‑to‑day work. The Bank of Latvia does not have comparable experience in handling complaints or providing consumer consultations—at present, it forwards all received complaints to CRPC. No data has been provided to demonstrate that the Bank of Latvia could assume these functions more quickly, more efficiently or with higher quality. On the contrary, dividing functions would create additional bureaucracy and lead to contradictory application of regulatory requirements.
This would delay complaint handling, create uncertainty and result in less predictable supervision for businesses.
The objective of the reform is unclear and does not demonstrate tangible benefits for consumers. No clearly identified risks in CRPC’s work have been presented, no quantitative evidence justifying the need to change the supervisory authority has been provided, and no real consumer benefit has been demonstrated.
Moreover, in the banking sector, where the Bank of Latvia already acts as the supervisor, credit in Latvia is among the most expensive in the euro area. This provides no basis to assume that the Bank of Latvia could positively influence service pricing or reduce consumer costs.
The scope of the reform also fails to address key sectoral issues, including:
- the unresolved issue of dual supervision of entities supervised by the State Revenue Service;
- the lack of assessment of the out‑of‑court debt recovery sector and credit intermediaries, which are directly linked to financial services and where CRPC is the main regulator—separating these entities from the rest of the sector would further increase fragmentation and bureaucracy in consumer protection;
- the absence of analysis regarding the practical redistribution of complaint handling between institutions.
This points to insufficient preparation of the reform. The reform is opposed by consumer protection organisations, the non‑bank lending sector and several industry associations.
Despite CRPC’s strict supervisory practice and imposed sanctions, market participants support maintaining consumer rights supervision within CRPC’s competence.