FINLAND Law and Practice Contributed by: Olli Kiuru, Mia Rintasalo and Essi Hietaoja, Waselius
providing consumer credits and P2P loan bro - kers must register with the FIN-FSA, which supervises their operating practices, such as sales, marketing and lending principles, in the same way as other lenders. Moreover, as the Finnish legal system is based upon the notion of freedom of contract, the pro - vision of loans in Finland remains fairly unregu - lated 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 busi - nesses. Conversely, however, consumer loans are gov - erned 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 exceptions, such as in con - sumer sales that encompass consumer protec - tion. With regard to consumer loans specifically, this is evident in Chapter 7, Section 5 of the CPA, according to which all such terms that conflict 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 inter - est rate in conjunction with the cost of credit in consumer loans is capped pursuant to Section 17a of Chapter 7. 4.2 Underwriting Processes In Finland, industry participants are obliged to conduct 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 partici - pants may only grant consumer 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. The creditworthiness assessment is to be based upon 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 taken per se, but rather stipulates the information that needs to be reviewed prior to granting consumer credit. As of 1 April 2024, the creditworthiness assessment has largely been based on information 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 generally resort to reviewing the positive and negative credit 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 Positive Credit Register (739/2022) and the Credit Information Act (527/2007), industry participants fall within the scope of these acts in addition to the CPA. The consequence for consumer credit providers is threefold: • they are to ensure adequate privacy protec - tion whilst processing credit information; • they are obliged to assess the creditworthi - ness of consumers in light of correct and appropriate information; and • they are to advance good practice of credit information.
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