Latvia's Central Bank to Take Over Supervision of Non-Bank Lenders
Starting January 1, 2027, the Bank of Latvia will take over licensing and supervision of non-bank consumer lenders from the Consumer Rights Protection Centre. The reform aims to reduce fragmented oversight and strengthen consumer protection in financial services.
Latvia has adopted changes that will consolidate financial sector oversight functions under a single authority. Starting January 1, 2027, the Bank of Latvia will take over licensing and supervision of non-bank consumer lenders from the Consumer Rights Protection Centre, along with all consumer rights protection functions across the financial sector and oversight of unfair commercial practices and advertising in financial services.
A growing segment, growing risks
Santa Purgaile, deputy governor of the Bank of Latvia, explains that the non-bank consumer lending sector has been expanding rapidly, bringing with it growing risks that require a more systematic management approach. She notes that most European countries already operate a centralized supervision model, with 17 countries assigning these functions directly to their financial sector regulator.
More market participants under supervision
Once the reform takes effect, the Bank of Latvia's oversight will expand beyond the roughly 200 financial market participants it already supervises to include 38 non-bank consumer lending service providers and 36 credit intermediaries and their representatives. Additionally, starting November 20 of this year, providers of deferred payment services will also come under the central bank's supervision.
Goal: less bureaucracy, more protection
The Bank of Latvia emphasizes that the reform is intended to reduce fragmented oversight, use state resources more efficiently, and cut administrative burden, while simultaneously strengthening protection for financial service users and fostering fairer competition in the sector.
The transition to the new framework will happen gradually — by January 1, 2028, the supervisory approach for the non-bank consumer lending segment is expected to be refined. During this process, the Bank of Latvia will cooperate with the Fintech Latvia Association and other market participants to develop the necessary regulations. The central bank affirms that consumer rights protection will remain a priority, and that the transferred functions will be carried out in full.
