Crossing Borders, Ensuring Compliance: The LOANCOS Story

The LOANCOS Group is the largest independent credit platform for mortgage loans in Germany regarding business process outsourcing (BPO). It enables digitalized and scalable management of loan portfolios – especially for the residential lending business. On behalf of their customers, LOANCOS Group also takes care of the processing of loans, and supports the customers with the expertise of each subsidiary. About one hundred employees work for LOANCOS at its locations in Frankfurt am Main, Eschborn and Essen. 

LOANCOS is aiming to entrer into an agreement with a Scandinavian Financial Institution to act as a back-up service provider for loan portfolios in the Nordics. The assignment would be servicing these loans before they are terminated. 

To be successful in acting as a back-up service provider for two Scandinavian loan portfolios, it is necessary that LOANCOS fulfills the regulatory requirements in the specific countries. 

The Challenge

The assessment seeks to investigate the possible licenses relevant for LOANCOS, both as a Back-Up Servicer and Replacement Servicer for the respective countries. The question of whether providing the service would be considered as outsourcing was also investigated as this could establish additional legal obligations for LOANCOS.  

The Solution

Advisense reviewed the agreements between the bank and LOANCOS to evaluate the types of services are included. Based on the service types, for each country a regulatory evaluation was conducted for each country.   

Advisense made a thorough legal assessment, commissioning two comprehensive evaluations for each location where the services will be operated. The assessment was conducted by Advisense’s experts from the Nordics, specialized in the legal frameworks and regulatory landscapes of the respective countries. 

The Result

Key result of the evaluation: In the EU, regulatory requirements can show significant divergence even among neighboring countries. Considering this complexity, seeking assistance from local legal experts is not only advisable, but essential to ensure regulatory compliance and mitigate potential legal risks effectively.

From Advisense’s feedback, we gained a comprehensive understanding of the legal landscape in each country, identifying any potential risks or legal hurdles. Based on these results we can ensure that our operations are conducted in full compliance with all applicable laws and regulations.  

Daniel Barnsteiner, Head of Legal, LOANCOS