Malta: lending & credit regulation

Consumer credit activities in Malta are regulated under the framework implementing Directive (EU) 2023/2225, which updates the rules for credit agreements with consumers and repeals the previous Directive 2008/48/EC. The Malta Financial Services Authority (MFSA) is the primary supervisor responsible for enforcing these conduct of business rules and ensuring compliance with the new directive's requirements.

For credit institutions, the MFSA also provides specific regulatory guidance on prudential matters, such as the calculation of the Non-Performing Loans ratio, to ensure accurate reporting and financial stability. This dual approach covers both the conduct of lending to consumers and the prudential health of the lending entities.

The regulatory environment is characterized by strict adherence to EU harmonized standards, with recent updates focusing on enhancing consumer protection and transparency in credit agreements. The MFSA's role is central in overseeing these adjustments and maintaining the integrity of the Maltese credit market.