FINLAND Law and Practice Contributed by: Olli Kiuru, Jere Lehtimäki and Essi Hietaoja, Waselius
4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities In Finland, the difference in the regulation of fiat cur - rency loans provided to different entities is mainly threefold. First, the activity of providing loans that are financed via repayable funds received from customer deposits is defined as credit institution operations, in accord - ance with the Act on Credit Institutions (ACI), which lays down provisions stipulating the right to engage in the practice of credit institution operations. Accord - ingly, in order to engage in credit institution opera - tions, authorisation is required through the FIN-FSA. However, in this regard, the ACI does not make a dis - tinction between the provision of loans to small and other types of businesses; it merely lays down the general prerequisites applicable to businesses engag - ing in credit institution operations, none of which are concerned with the business type of the borrower or its size. Secondly, unlike businesses engaging in credit institu - tion operations, businesses providing loans without the use of repayable funds are not governed by the ACI. However, businesses providing or intermediating consumer credit and P2P loan brokers must register with the FIN-FSA, which supervises their operating practices, such as sales, marketing and lending prin - ciples, in the same way as other lenders. Moreover, as the Finnish legal system is based upon the notion of freedom of contract, the provision of loans in Finland remains fairly unregulated and, to a large extent, parties are free to agree on the terms they wish to incorporate into their contracts. Thus, similar to businesses engaging in credit institution operations, there are no significant differences in the regulation of loans provided to small or other types of businesses. Conversely, however, consumer loans are governed under the CPA, meaning that there are, of course, substantial differences between the provision of loans to consumers and companies. Although the Finnish
legal system is based upon the notion of freedom of contract, the notion is subject to certain excep - tions, such as in consumer sales that encompass consumer protection. With regard to consumer loans specifically, this is evident in Chapter 7, Section 5 of the CPA, according to which all such terms that con - flict or deviate from said chapter’s provisions in a way that is detrimental to the consumer shall be deemed null and void. Consequently, unlike in the provision of loans to companies whereby the interest rate is open to negotiation, the interest rate in conjunction with the cost of credit in consumer loans is capped pursuant to Section 17a of Chapter 7. Due to the national imple - mentation of the CCD2, from 20 November 2026, the vast majority of interest-free and cost-free consumer credit will fall within the scope of applicability of the In Finland, industry participants are obliged to con - duct a creditworthiness assessment prior to granting consumer credit, pursuant to Chapter 7, Section 14 of the CPA. Moreover, according to Section 16a of said chapter, industry participants may only grant con - sumer credit where the creditworthiness assessment indicates that the obligations deriving from the credit agreement are likely to be fulfilled in accordance with what is required under the credit agreement. CPA’s rules on consumer credit. 4.2 Underwriting Processes The creditworthiness assessment is to be based upon (non-discriminatory) information relating to the con - sumer’s income and other information relating to the financial condition of the consumer. In other words, the law does not specify how the underwriting process is to be carried out per se, but rather stipulates the information that needs to be reviewed prior to granting consumer credit. As of 1 April 2024, the creditworthi - ness assessment has largely been based on informa - tion retrieved from the positive credit register, as well as other information. The use of (and reporting to) this register is mandatory. To satisfy their obligation, industry participants gener - ally resort to reviewing the positive and negative cred - it information of the consumer and, where deemed necessary, obtaining additional information, such as employment details. Since the use and processing of credit information is governed under the Act on the
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