Regulatory Alerts2026-05-26
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Cabinet of Ministers approves legislative package for unified financial sector supervision
The Cabinet of Ministers approved a package of 13 draft laws to transfer the licensing and supervision of non-bank consumer lenders and consumer rights protection in financial services from the Consumer Rights Protection Centre to the Bank of Latvia. The reforms integrate these entities into a unified supervision model under the Bank of Latvia, aiming to reduce administrative burdens, eliminate functional overlaps, and implement a risk-based supervisory approach. The new funding model introduces a proportionality principle linking supervision fees to credit portfolio volume, which is expected to significantly reduce costs for most market participants while increasing them for the two largest entities. The legislative package requires amendments to multiple related laws, including those on alternative investment funds, financial instruments, and unfair commercial practices, and must still be adopted by the Saeima.