FORT represents AS Mintos in a matter about operation of a peer-to-peer lending platform
The FORT Riga Office is continuously advising a non-bank lender AS Mintos in solving an issue with the Consumer Rights Protection Centre (CRPC) about permissibility of assignment of claims on a peer-to-peer lending or investment platform.
After an eight-month communication with the competent authorities on Wednesday, September 16, an application was submitted to the Administrative District Court under guidance of FORT asking to recognize that CRPC has incorrectly applied legal provisions in respect to assignment of claims arising out of consumer credit agreements.
Launching of judicial proceedings is a result of lack of interest showed by the competent authorities in organizing this issue. For eight months there was an intensive ongoing correspondence with CRPC elaborating on the current legal framework in Latvia and the European Union allowing assignment of claims by lenders of consumer credits. Furthermore, an appeal was made to form a professional workshop involving competent government agencies, as well as several legal opinions were provided about consumer credits. Nevertheless, no solution of the problem has been accomplished during this period of time.
The decision to bring an action in court was adopted after CRPC extended the licence of AS Mintos on condition – prohibition to assign the claims arising out of consumer credit agreements for peer-to-peer lending or investment platforms, or to perform other similar activities. Due to the restriction set forth by CRPC credits can be offered only by sponsors of foreign origin and legal entities. Thus, a situation has occurred that a practice for raising funding for enterprises widely used in Europe is currently denied for private sponsors from Latvia.
In its application AS Mintos asks to set an obligation for CRPC to issue an administrative act about reregistration of the special permit (licence) for provision of consumer lending services without establishing a prohibition for peer-to-peer lending or asset pooling platform for investments to assign claims or perform similar activities.