With the implementation of the new EU Consumer Credit Directive (Directive (EU) 2023/2225) (CCD2), German lawmakers are facing a widespread reorganization of laws concerning credit agreements for consumers. The German government’s draft bill (Regierungsentwurf) of 3 September 2025, not only proposes fundamental changes to the German Civil Code (Bürgerliches Gesetzbuch – BGB) and the Introductory Act to the German Civil Code (Einführungsgesetz zum Bürgerlichen Gesetzbuch – EGBGB), but also various adjustments to the German Trade Regulations Ordinance (Gewerbeordnung – GewO). A key component will be the dedicated licensing requirements for credit intermediaries (now Section 34k GewO-new instead of Section 34c GewO). At the same time, the Act on the Supervision of Sales Financing (Absatzfinanzierungsgesetz – AbsFinAG) will create a new, independent regulatory law. For the first time, this law will apply to retailers, service providers, and platforms that offer their own deferred payments, instalments, or invoice purchases and thus effectively act as creditors.
The bill is currently being debated in the Bundestag and Bundesrat. It is scheduled to come into effect in November 2026.
This will result in a two-track regulatory approach in the future:
- The new Section 34k GewO governs the mediation of consumer credit agreements by companies. The licensing requirement for mediating corporate loan agreements is to be removed.
- The AbsFinAG places those providers under supervision that grant payment deferrals or funding aid – regardless of whether they cooperate with an external factoring company or financial service provider.
This raises the question, particularly for small and medium-sized enterprises (SMEs), which are increasingly offering their customers flexible payment models: When will a company be considered a creditor within the meaning of the AbsFinAG, thereby requiring registration with the Federal Financial Supervisory Authority (BaFin)?
Starting point: Expanded scope of consumer credit law
The CCD2 aims to harmonize consumer lending across Europe and significantly strengthen consumer protection. As part of its implementation, the government’s draft bill also provides for structural changes to the German Civil Code (BGB) and the Introductory Act to the German Civil Code (EGBGB), including a restructuring and expansion of pre-contractual information requirements, new EU standard forms, and the transition from written to text form for general consumer loan agreements.
At the same time, the material range of consumer credit law will be significantly expanded. In future, not only traditional consumer credit agreements will be covered, but also forms of financing that have so far been scarcely regulated. These include interest-free consumer credit agreements and interest-free or low-interest deferred payments. Invoice purchases and instalment payment models will also be covered by the new framework, along with will small loans under €200 or loans with particularly short terms.
This significant expansion of the range of application means that business models that were previously largely outside the scope of consumer credit law will be regulated for the first time. This applies in particular to the now widespread buy-now-pay-later models (BNPL) and simple, often informally structured instalment payment offered by retailers. The CCD2 allows only very narrow exceptions, such as interest-free deferred payments with a maximum duration of 50 days, provided that no external creditor is involved. For large online traders and service providers, an even stricter limit of 14 days applies. The legislator is responding to the fact that market-dominant providers with a large customer base and considerable financial reach could particularly easily tempt consumers into making impulsive purchases and grant deferred payments on a significant scale without adequate consumer protection.
For many retailers and online providers, this means that their previously straightforward and often customer-friendly instalment payment solutions will in future be regarded as financing models relevant under credit law.
The new Sales Financing Supervision Act
The AbsFinAG creates, for the first time, an independent supervisory framework for companies that grant consumers their own deferred payments, invoice purchases, or instalment payments and thus act economically as creditors. This covers both commercial providers and companies whose activities require a commercially organized business operation. The decisive factor is whether the company grants general consumer credit agreements within the meaning of the new Section 491 (2) BGB or corresponding funding aid in accordance with the new Section 506 BGB.
Companies that fall within the scope of the AbsFinAG must register with BaFin in the future and are subject to ongoing supervision. In particular, BaFin monitors compliance with regulatory organizational requirements and documentation obligations, including the duty to provide comprehensible reasons for credit decisions, as well as adherence to minimum organizational standards. In addition, there are requirements for the design of remuneration systems, as known from the Institutional Remuneration Ordinance. The obligation to assess creditworthiness before entering into a contract is also of considerable practical relevance: going forward, a deferred payment or an instalment payment may only be granted if there is a positive assessment of the consumer’s ability to repay. This means that instalment payments in return for a fee, which are widespread amongst retailers, will become a business model relevant to supervisory law.
The legislator provides for a narrowly defined exemption to this rule for SMEs. However, this only applies where the deferred payment is granted entirely free of charge and only limited, legally compliant late payment charges may be incurred. If, on the other hand, interest, fees or other charges are imposed, the exception no longer applies, meaning that the company becomes fully subject to BaFin supervision and the registration requirement.
These requirements largely correspond to the regulatory framework that also applies to credit institutions. However, there is relief for companies that assign their payment claims to a financial institution and structure the consumer contract in accordance with its specifications. In such cases, key obligations — including creditworthiness assessments — can be transferred to the intermediary institution, significantly reducing the regulatory burden, particularly for SMEs.
Conclusion
With the implementation of CCD2 into national law, expected on 20 November 2026, a completely new regulatory framework for deferred payments, invoice purchases, and instalment payments will come into effect. Companies that have previously offered deferred payments for a fee will benefit from a twelve‑month transition period. Those that fail to register with BaFin within this period risk the imposition of a fine.
For retailers and SMEs, this means that going forward they will be considered creditors as soon as they offer consumers deferred payments in return for a fee – making them subject to strict regulatory obligations such as credit checks, documentation requirements and organizational standards. The planned exemption applies only to entirely interest‑free deferred payments with limited late‑payment charges and will therefore often be of little practical relevance. Companies should therefore assess at an early stage whether their existing instalment payment models fall within the scope of the AbsFinAG, whether cooperation with financial institutions could help reduce the regulatory burden, and whether contracts, terms and conditions or checkout processes require adjustment. Those who act in timely manner can avoid risks and continue to offer flexible payment models with legal certainty.
For further information, please contact:
Johannes Wirtz, LL.M., Partner, Bird & Bird
johannes.wirtz@twobirds.com
