Today’s column examines the new Credit Review Office Bill, which has received its first reading and has just been published. Bill 156 of 2025 purports to establish a Credit Review Office.
Upon a first glance, my reaction was one of perplexity at the unfamiliar title and subject matter. A quick Google search on ‘credit review’ popped up this item: ‘The Credit Review Law in Ireland’, and explained that: “Credit Review is a body under the aegis of the Department of Finance. It was established by the Minister for Finance in 2010 under section 210 of the NAMA Act 2009, to facilitate access to bank credit for viable businesses.”
This triggered a suspicion that maybe the Irish measure was the unacknowledged source for the proposed local agency. The Irish agency was announced by the Minister of Finance of Ireland in the 2009 Budget, and Guidelines were later issued under the 2009 law. Bill 156 has seemingly borrowed from these Guidelines, which have the same objectives. (S.I. No. 127/2010 – Guidelines Issued Under Section 210(1) of the National Asset Management Agency Act 2009 Regarding Lending Practices and Procedures and Relating to the Review of Decisions of Participating Institutions to Refuse Credit Facilities.)
In terms of the local Bill, should it make it into law, the new Credit Review Office (‘Ufficcju għall-Analiżi tal-Kreditu’) would have authority to receive complaints from traders and business entities, designated in the Bill, against refusals by authorized lending institutions to grant them loan or other credit facilities not exceeding two million euros.
It cannot consider similar complaints from consumers, as this measure serves exclusively business interests. It involves official intrusion into purely banking decisions, allowing civil servants to second-guess expert banking opinions and implicitly revealing a degree of distrust in banks’ own internal abilities and processes.
The Bill also unwisely and misguidedly places the credit review function within the statutory functions of the Arbiter for Financial Services. In fact, the Arbiter legislation of 2016 is being specifically amended for that purpose.
Credit experts are specialists and very different from consumer protection complaints officers. It would be like burdening product safety experts with the responsibility to enforce price controls. The two subjects are unconnected and lack synergy. Such an illogical confusion of roles should never have been contemplated, and the Arbiter’s Office should not be burdened with this new Bill.
An obvious risk is that the Arbiter’s Office will lose its consumer focus and will now divert precious time talking to businesses and deal with their complaints. This is not why the Arbiter was established, and the government has no mandate to tamper with it.
After article 4(2) decrees that the Office should “act independently and impartially”, article 7then just as clearly makes the Office “accountable to the Minister for the discharge of its duties”, thereby opening the door for potential ministerial intrusion.
Incidentally, the Minister responsible for the Economy has been allowed to encroach into an area more properly pertaining to the Minister responsible for Financial Services, which includes banks and financial institutions.
The MFSA has also allowed itself to be roped in, as it usually does, despite its multifarious range of activities already entrusted to its control and oversight.
The MFSA shall henceforth waste time to ‘supervise and enforce’ the charter (‘karta’ in Maltese) which this law now requires from lending institutions, and which will henceforth form part of our banking law.
Noteworthy differences from the Irish original include:
In Ireland, banks participate voluntarily, if they want to, whereas the Maltese Bill imposes it as an obligation.
The Irish Office is funded by the participating Banks, whereas the State will fund the local equivalent.
A complaint to the Irish Office automatically involves the payment of a fee; in our case, the Bill remains ambiguous.
Fortunately, the proposed Credit Review Office can only issue recommendations and not binding decisions. This is the situation in Ireland too, which explains why they only issued Guidelines on the subject. Here, the measure has been elevated to a full-blown statute.Thankfully, the Credit Review Office can only offer non-binding opinions, probably the best feature of this unnecessary new proposed legal initiative.
David Fabri LLD, PhD is a law lecturer specialising in consumer, corporate and financial services law. His publication on the development and state of Maltese Consumer Law has recently been published by MidSea Books.
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