The Ministry of Finance of Latvia (MoF) is proposing that, from 1 January 2027, the functions of registering, licensing, and supervising non-bank lenders be transferred to the Bank of Latvia, according to information published on the Legal Acts Drafting Portal.
The MoF has prepared an informational report on the designation of a single licensing and supervisory authority for consumer credit providers.
The report explains that, by a Cabinet of Ministers order of 15 July 2025, an action plan for attracting investment and improving access to finance in the national economy was approved. The plan includes a task for the MoF, as the responsible authority, in cooperation with the Bank of Latvia and the Ministry of Economics of Latvia (MoE), as well as the Consumer Rights Protection Centre (CRPC), the association Fintech Latvia Association, and the Latvian Financial Industry Association, to submit a report to the Cabinet of Ministers by 31 December 2025 assessing the establishment of a single credit supervision and control authority. The aim is to reduce administrative burden and ensure a transparent, unified approach to the supervision and control of lenders.
Currently, Latvia’s regulatory framework provides that the licensing, supervision, and control of lenders are carried out by three national-level supervisory institutions—the Bank of Latvia, the CRPC, and the State Revenue Service of Latvia(SRS). The intensity and focus of supervision differ depending on the risks inherent in the activities of a particular financial service provider.
The Bank of Latvia regulates and supervises around 233 market participants, including credit institutions, electronic money institutions, insurance companies, private pension funds, insurance intermediaries, investment brokerage firms, alternative investment fund managers, investment management companies, credit unions, reinsurance service providers, payment institutions, crypto-asset service providers, and currency exchange companies.
At the same time, the CRPC supervises approximately 38 capital companies that have received a special permit or licence to provide consumer credit services, while the SRS supervises around 317 credit service providers whose activities do not require a special permit.
The MoF explains that the Bank of Latvia is responsible for financial literacy in Latvia, while the CRPC also provides public education on responsible borrowing and consumer rights in the field of consumer credit.
Although the division between licensed and supervised entities is defined in legislation, it is not always possible to draw a clear boundary in terms of establishing the regulatory environment and handling complaints. There are situations where, for example, a subsidiary of a credit institution that provides consumer loans is licensed and supervised by the CRPC, while the parent company—the credit institution itself—is supervised by the Bank of Latvia. This creates fragmentation in supervision.
There are also service providers that offer credit services to both consumers and legal entities, where supervision is carried out by both the SRS and the CRPC. One example is Altum. As a result, a single credit service provider may be subject to oversight by multiple supervisory bodies, which in practice can mean parallel on-site and off-site inspections.
“With a fragmented supervisory framework and an increasing number of new players entering the financial market, financial and human resources among state institutions are not efficiently concentrated in one place, which may indicate unnecessary administrative burden and duplication of tasks arising from overlapping functions,” the MoF states.
To ensure that the redistribution of functions and changes to the supervisory framework do not create additional administrative burdens for the consumer credit sector or for lending activity overall, a scenario is being analysed under which the Bank of Latvia would assume supervision over consumer credit providers currently licensed by the CRPC, as well as mortgage credit intermediaries and their representatives. This would also include the protection of consumer rights and interests for consumers receiving financial services in Latvia.
With regard to entities currently supervised by the SRS, no additional requirements or changes to the supervisory framework are proposed. At the same time, the MoF notes that the Ministry of Economics, as the responsible sectoral ministry, will continue to develop, organise, and coordinate consumer protection policy.
The MoF proposes transferring to the Bank of Latvia the licensing and supervision of capital companies referred to in the Consumer Rights Protection Law that are currently licensed by the CRPC to provide consumer credit services, as well as the registration and supervision of credit intermediaries and their representatives who offer consumers credit secured by real estate mortgages or intended to acquire or retain rights to real estate.
A Cabinet of Ministers protocol decision provides that the MoF, in cooperation with the Bank of Latvia, the Ministry of Economics, and the Ministry of Justice of Latvia, must develop amendments to the relevant legislation and submit them to the Minister of Finance for consideration by the Cabinet of Ministers by 30 April 2026. These amendments would provide for the transfer of the aforementioned functions to the Bank of Latvia from 1 January 2027.
The informational report was submitted for inter-institutional coordination on 23 December, with the deadline for submitting proposals set for 5 January 2026.
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