CCD II in the Baltic States: Consumer Credit and BNPL Licensing Requirements for Fintech (2026)

As every business seeking a consumer credit provider license faces new requirements under the CCD II, the Baltic consumer credit market is entering a period of significant regulatory change. All three Baltic states are in the process of transposing the European Union’s Consumer Credit Directive II (CCD II) into national law, introducing updated standards for consumer protection, creditworthiness assessments, advertising, and pre-contractual information disclosure. The overarching goal of the Directive is to create a more consistent and transparent consumer credit market across the EU.

For non-bank lenders, fintech companies, and credit intermediaries operating in the region, understanding how CCD II is being implemented at the national level is essential. Lithuania, Latvia, and Estonia are each taking distinct approaches to transposition, with practical implications for licensing, compliance, and market entry strategies.

What Does CCD II Change? Key Requirements for Consumer Credit Providers

CCD II expands the scope of regulated consumer credit agreements to cover a broader range of products, including smaller loans, higher-value credits, and modern financial instruments such as buy-now-pay-later (BNPL) schemes. The principal changes affecting market participants are as follows:

• Broader coverage: Credits below €200 and above €75,000 are now regulated in certain cases, including loans linked to residential property renovation.
• BNPL regulation: The Directive narrows existing exemptions and requires BNPL services to comply with standards equivalent to those of a regulated consumer credit provider, particularly for larger platforms.
• Creditworthiness assessments: Lenders must conduct a thorough assessment of whether consumers are able to meet their repayment obligations, even in the case of short-term or interest-free arrangements, in order to ensure responsible lending practices.
• Pre-contractual information: Detailed and standardised disclosure requirements apply to ensure that consumers are fully informed prior to entering into credit agreements. Information must be divided into essential and supplementary elements, with the most critical details required to fit on the first page of any disclosure document.
• Automated decision-making: Where a credit decision is made by automated means, consumers must be informed of this and have the right to request human review, receive an explanation of the outcome, and ask for the decision to be reconsidered. Where an application is declined, the consumer must be notified within three business days, including the reasons and available avenues for appeal.
• Advertising standards: Advertising must be accurate, clear, and non-misleading. Prohibited content includes any suggestion that credit improves a consumer’s financial situation, serves as an alternative to saving, or that existing financial obligations are irrelevant to credit decisions. All advertisements must carry a prominent warning: “Warning! Borrowing costs money.”
• Compensation policies: Remuneration structures must be aligned with sound risk management principles and must not incentivise staff to make credit decisions based solely on quantitative targets, such as the volume of approved applications.
• Employee competence: Mandatory professional knowledge and skills requirements apply to employees working directly with consumer credit agreements. Licensed consumer credit providers must be able to demonstrate staff competence to the supervisory authority upon request.
• Forbearance measures: Creditors are expected to apply reasonable measures before initiating enforcement proceedings, thereby establishing a unified baseline for consumer protection across member states.

These changes require national authorities to update their licensing, supervisory, and compliance frameworks, while also placing new operational obligations on market participants.

CCD II in Lithuania: New Consumer Credit Law and Licensing Timeline

In Lithuania, the transposition of CCD II is at an advanced stage. A draft Law on Consumer Credit has been prepared, incorporating the requirements of the Directive into national legislation, and is currently progressing through the legislative process.

The proposed law broadens the scope of regulated activity and applies the full range of CCD II obligations to the Lithuanian market. Entities that are already listed in the public registers of consumer credit providers, intermediaries, or peer-to-peer lending platform operators on the date the law enters into force will have six months to submit documentation to the supervisory authority confirming compliance with the new qualification and experience requirements. Our legal team assists with the entire consumer credit provider license update process to ensure you meet this deadline.

Both existing market participants and entities not previously subject to consumer credit regulation will need to review and adapt their operations in preparation for the new framework.

CCD II in Latvia: Centralised Supervision and What Changes in 2026–2027

In Latvia, the government has put forward a regulatory reform aimed at centralising supervision of non-bank consumer lenders under the Bank of Latvia. The proposed initiative is designed to simplify consumer credit provider license and registration procedures, reducing the administrative burden on market participants, and lower barriers to entry for new operators.
The key elements of the Latvian proposal include:

• licensing and supervisory functions for companies providing consumer credit services;
• registration and oversight of credit intermediaries, including those operating in the mortgage-secured lending segment;
• monitoring of deferred payment services offered directly to consumers by companies;
• strengthened consumer protection measures addressing unfair commercial practices and advertising.

It should be noted that the proposed centralised supervisory model is not expected to be fully operational until 2027. When national legislation implementing CCD II enters into force in November 2026, supervisory responsibilities will remain distributed among existing authorities in the interim.

CCD II in Estonia: Who Supervises Consumer Credit After Transposition?

Estonia is in the process of transposing CCD II while preserving its existing supervisory structure. The relevant legislative instrument is currently progressing through the Estonian Legislative Information System, and formal adoption remains ongoing.

Under the proposed framework, regulatory oversight would continue to be shared among established authorities: the Financial Supervision and Resolution Authority, the Consumer Protection and Technical Regulatory Authority, and the Data Protection Inspectorate. Each body would remain responsible for a distinct area of regulation – covering consumer credit provider licensing, consumer protection, and data governance respectively – resulting in a structured and predictable supervisory environment.

This distributed model enables specialised supervision while ensuring continuity for market participants. Companies operating in Estonia can expect clarity as to which authority to approach for each regulatory matter, with established procedures remaining in place throughout the implementation period.

CCD II Compliance Checklist for Fintech Companies and Non-Bank Lenders

Across all three Baltic states, CCD II transposition requires market participants to take stock of their operations and plan carefully across several areas:

• Licensing and registration: Lenders and intermediaries must confirm that their activities are properly authorised. Our experts can review whether your business model requires a new or updated consumer credit provider license under the revised national frameworks.
• Consumer protection compliance: Enhanced pre-contractual information obligations, responsible lending standards, and fair advertising requirements are proposed in each jurisdiction and will need to be reflected in internal processes and documentation.
• BNPL and deferred payment services: Providers of BNPL and deferred payment products must align their offerings with CCD II requirements and the specific national exemptions available in each country, including stricter rules proposed for larger enterprises.
• Cross-border considerations: Firms active in multiple EU member states must monitor regulatory differences between jurisdictions, as CCD II does not establish a single unified licensing regime.
• Internal governance and remuneration: Compensation structures, operational procedures, and compliance frameworks may require adjustment to meet both Directive-level expectations and the specific requirements of national regulators.

Addressing these areas proactively will allow companies to reduce operational and compliance risk, maintain market access, and position themselves to take advantage of emerging opportunities in the Baltic consumer credit sector.

What to Watch in 2026: CCD II Legislative and Regulatory Milestones

Conclusion: Navigating the Future of Consumer Credit in the Baltics

CCD II is reshaping the consumer credit landscape across the Baltic states, strengthening consumer protections and promoting a more level playing field among lenders.
Each of the three jurisdictions is taking a distinct approach to transposition:

• Lithuania has prepared a comprehensive draft law with detailed obligations across advertising, disclosure, and internal governance.
• Latvia has proposed a centralisation of supervisory functions to improve market access, though this is expected to take effect only from 2027.
• Estonia is retaining its distributed supervisory model, offering stability and predictability for operators throughout the transition.

For fintech companies, non-bank lenders, and credit intermediaries, aligning internal processes with both the Directive requirements and the specific provisions of each national draft framework will be essential for maintaining compliance, operating efficiently, and securing a competitive position in the region in 2026 and beyond.

Our legal team provides full support in navigating CCD II compliance, compliance, licensing, consumer protection, and fintech regulatory requirements in Lithuania, Latvia, and Estonia.