Fintech 2026

LUXEMBOURG Law and Practice Contributed by: Andreas Heinzmann, Valerio Scollo and Angela Permunian, GSK Stockmann

Loans in a Professional Context The legal framework applicable to non-consumer loans includes fewer mandatory provisions, as gen - eral principles of contract law apply to the loan agree - ments. However, providing lending activities even in a professional context is in principle a regulated activity. According to the Financial Sector Law, profession - als performing lending operations – ie, professionals engaging in the business of granting loans to the pub - lic for their own account – are subject to authorisation by the CSSF. 4.2 Underwriting Processes The underwriting process used by industry par - ticipants typically varies depending on the type of borrower and the type of credit. Specific regulatory requirements apply, namely in relation to AML/CFT All professionals operating in the financial sector typi - cally need to comply with obligations relating to AML/ CFT (see 2.14 Impact of AML and Sanctions Rules ). In particular, the AML Law requires professionals to establish a customer acceptance policy adapted to their activities and to apply customer due diligence measures when establishing a business relationship. These KYC obligations include identifying and verify - ing the customer’s and the customer’s ultimate ben - eficial owner’s identities, and may also be conducted through an online video conference. Specific Obligations Relating to Consumer Lending obligations and consumer protection. Obligations Relating to AML/CFT If a loan is qualified as a consumer credit agreement (see 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities ), the lender must adhere to certain pre-contractual obligations. Prior to entering into a consumer credit agreement, the lender must provide the consumer with the necessary information to compare the dif - ferent consumer credit proposals in order to make an informed decision, which is provided by using a standard European consumer credit information form. In addition, the lender must assess the consumer’s creditworthiness on the basis of sufficient information. Lastly, consumer credit agreements must be drawn up on paper or other durable medium, and each party

tions, the order must be executed in accordance with such instructions.

4. Online Lenders 4.1 Differences in the Business or Regulation of Fiat Currency Loans Provided to Different Entities With regard to regulation on online lenders, the main difference relates to whether the borrower is a con - sumer or not. Luxembourg legislation on lending in a professional or commercial context does not in prin - ciple separate different categories of legal entities based on, for example, the size of the business or the sector in which the borrower operates. Loans to Consumers Specific mandatory rules apply to credit agreements between a consumer and a lender acting in the con - text of any business activity. Lenders providing con - sumer credit need to be licensed either by the CSSF or in accordance with the Law of 2 September 2011 relating to the establishment of certain businesses and business licences. Currently, according to the Luxembourg Consumer Code, provisions on consum - er credit apply to agreements under which the credi - tor grants consumer credit in the form of a deferred payment, loan or other similar financial accommoda - tion, if, among others, the total amount of the credit is between EUR200 and EUR75,000. However, the new Directive (EU) 2023/2255 on credit agreements for consumers (CCD II) expands its scope by remov - ing any minimum threshold and setting a maximum amount of EUR100,000. These changes will apply by November 2026, once the Directive is transposed into national law. Specific obligations apply to the contractual rela - tionship, which relate namely to the pre-contractual information, assessment of the consumer’s credit - worthiness, content of the agreement, right of with - drawal and right of early repayment of the credit. In addition, similar obligations apply to mortgage credit agreements – ie, agreements where a creditor grants a credit to a borrower in view of the acquisition of a residential immovable property.

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