Executive Summary
- What’s new: As of 20 November 2026, a stricter licensing regime for brokers of consumer credit and consumer financing agreements will take effect in Germany. Going forward, proof of expertise will be a prerequisite for obtaining a license. The new regime also prohibits linking employee compensation to sales targets and bars independent credit advisers from accepting lender-paid inducements for their advisory services.
- Why it matters: Under the new licensing regime, anyone who acts commercially and for remuneration as a broker for consumer credit agreements or consumer financing agreements must obtain a license. An exception applies for microenterprises and small and medium-sized enterprises that engage in intermediary activities solely to finance sales of their own goods and services.
- What to do next: Credit intermediaries that currently hold a license will need to determine whether their activities fall within the scope of the new regime. If so, they will need to apply for a new license no later than 31 May 2027. New intermediaries obtaining a license for the first time are subject to the same application date.
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Background
Starting 20 November 2026, a more rigorous German licensing regime for brokers of consumer credit and consumer financing agreements will commence, expanding proof-of-expertise requirements and prohibiting certain incentive practices for their advisory services.
Currently, credit intermediaries generally require a license pursuant to Section 34c para. 1 of the German Trade Act (Gewerbeordnung or GewO), regardless of whether they broker loans to consumers or businesses. Because this framework addresses the heightened consumer protection requirements and growing complexity of credit products only to a limited extent — and lacks specific competency requirements — the licensing regime for consumer credit intermediaries is being revamped and a new GewO Section 34k is being introduced.
The new requirements in Section 34k GewO stem from Germany’s implementation of the second Consumer Credit Directive (Directive (EU) 2023/2225). The directive seeks to establish a higher and harmonized level of consumer protection throughout the EU. The supporting Credit Brokerage Ordinance (DarlVermV) further specifies the requirements in Section 34k GewO.
Who Needs a License?
The licensing requirement for brokering business-to-business credit agreements will be repealed in November 2026. Under the overhauled regime, the licensing requirement generally applies to anyone who brokers consumer credit agreements or consumer financing agreements on a commercial basis and for remuneration (a credit intermediary). This includes (i) presenting or offering such agreements to third parties,(ii) assisting third parties with preparatory work or other pre-contractual administrative activities or (iii) concluding agreements with third parties on behalf of lenders.
Pure introducers whose role is limited to establishing direct or indirect contact between a prospective borrower and a lender are not treated as credit intermediaries. Similarly, merely referring a credit intermediary does not itself constitute an activity requiring a license.
To fall within the licensing requirement, an intermediary must receive remuneration for activities, either as a monetary payment or in another agreed form of economic benefit. The remuneration may stem from the lender or another third party. As before, the credit intermediary is obligated to disclose receiving a remuneration for their services, If the intermediary is compensated solely for selling goods or providing services, and not for brokering the consumer credit or consumer financing agreement, the licensing requirement does not apply.
As before, certain regulated entities — including credit institutions, investment firms, tied agents and asset management companies — are exempt from the licensing requirement when acting within the scope of their respective authorizations.
The updated regime will retain the exemption for companies that arrange credit agreements solely to finance their own sales of goods or provision of services. In the future, however, the exemption will be limited to intermediaries that qualify as microenterprises or small and medium-sized enterprises (SMEs). SMEs are enterprises with fewer than 250 employees and either an annual turnover not exceeding €50 million or a balance sheet total not exceeding €43 million, subject to the applicable aggregation rules for partner and linked enterprises.
Operating as a credit intermediary without the required license constitutes an administrative offense punishable by a fine.
What Requirements Apply?
Previously, obtaining a license required only that the applicant be reliable and financially sound, and ongoing obligations were largely limited to maintaining those standards and keeping adequate records. The revamped regime introduces additional requirements to obtain and maintain the license. The most significant changes are outlined below.
Proof of Expertise
Applicants will need to provide proof of expertise (Sachkundenachweis) to obtain a license as a credit intermediary. They can meet the requirement by passing the expertise examination administered by the Chamber of Industry and Commerce (Industrie- und Handelskammer (IHK)). An equivalent professional qualification may also suffice. Examples include a completed apprenticeship as a bank clerk, a continuing-education certification such as Certified Specialist in Financial Consulting, or another qualification listed in the DarlVermV. Individuals who have already passed the expertise examination for brokering real estate consumer credit agreements do not need to take an additional examination.
For legal entities, each person authorized to represent the entity must generally demonstrate professional competence. Where there is more than one such person, at least one representative must be competent as defined by the licensing rules. The other representatives must declare in writing that they delegate their obligation to the representative responsible for supervision.
A managing director may also delegate the obligation to prove expertise to an appropriate number of employees. Those employees must directly supervise the staff involved in credit brokerage and be authorized to represent the company. This delegation rule is consistent with the rules for insurance intermediaries.
For credit intermediaries that are already operating, transitional rules apply. A reassessment of reliability and sound financial standing is generally not required. Regulators may also waive the proof of expertise if the applicant has operated continuously as a credit intermediary since at least 1 January 2021 and submits its license application no later than 31 May 2027.
Professional Development
Credit intermediaries and employees directly involved in credit brokerage must maintain and regularly update their knowledge and skills in (i) customer counseling, (ii) the brokerage of and advice on consumer credit and (iii) financing and credit products. As with the proof of expertise, managing directors may delegate their own continuing-education obligation to an appropriate number of supervisory employees who are authorized to represent the company.
The licensing rules do not prescribe a minimum number of continuing education hours. If the competent licensing authority has reason to believe that relevant knowledge or skills are no longer current, it may require the licensee to submit evidence and documentation of continuing education completed during the preceding three calendar years. This may include training completed by employees subject to the continuing-education requirement.
Code of Conduct
Credit intermediaries must demonstrate the requisite professional competence, diligence and conscientiousness and act in the best interests of the borrower. They may not acquire ownership or possession of borrowers’ funds. Payment flows in connection with credit agreements must therefore generally take place directly between the lender and the borrower.
Employees of credit intermediaries must be able to act in the best interests of the borrower, and their compensation must not impair that ability. In particular, compensation cannot be linked to sales targets. This requirement also applies to companies that are exempt from the licensing requirement.
Documentation Requirements
Credit intermediaries must document all relevant processes in a manner that permits review from the time of engagement and must retain the corresponding records. The records must include (i) customer information, (ii) the fee paid by the client for the service and (iii) the date and reason for terminating the engagement. Records must be retained for five years.
Fee-based Credit Advisers
Credit intermediaries that offer independent advisory services or present themselves as independent advisers (Honorar-Darlehensberater) must base their recommendations on a sufficient number of consumer credit agreements available on the market. Furthermore, the intermediaries may not accept remuneration from lenders. The roles of credit intermediary and fee-based credit adviser are mutually exclusive. Correspondingly, the fee restrictions applicable to fee-based credit advisers do not apply to credit intermediaries.
Audits
Unlike financial investment intermediaries, credit intermediaries are not subject to regular annual audits. The competent authority may nevertheless order a qualified auditor to verify compliance with the requirements applicable to fee-based credit advisers, remuneration and record retention. The credit intermediary bears the audit costs.
Any audit findings must be documented in a report stating whether regulatory violations were identified. The report must be submitted to the competent authority.
Intermediary Register
Going forward, credit intermediaries will be required to register in the existing intermediary register immediately after the license is issued. Until now, the registration requirement applied only to insurance intermediaries, brokers of financial instruments and real estate consumer credit intermediaries.
The registration requirement applies both to the credit intermediary and to employees whose roles involve responsibility for brokering or advising on consumer credit agreements and consumer financing agreements. Companies must report those employees to the registration authority for entry in the register as soon as they assume their duties. Other employees do not need to be registered. Any changes to the recorded information must be reported to the registration authority without undue delay.
When Does This Take Effect?
Anyone who begins operating as a credit intermediary on or after 20 November 2026 must obtain a license under Section 34k GewO before commencing operations.
Those who already hold a license under the current regime must apply for a new license by 31 May 2027. A simplified procedure applies to applications submitted by that deadline. (As mentioned above, under this procedure, the applicant’s reliability and sound financial standing generally will not be reevaluated. The proof of expertise may likewise be waived if the applicant has operated continuously as a credit intermediary since at least 1 January 2021 and submits the license application no later than 31 May 2027.) The existing license will expire upon a final decision on the new application and, in any event, no later than 19 November 2027. If an intermediary does not submit an application by 31 May 2027, the license to continue business operations will lapse by 19 November 2027.
Companies that merely broker the conclusion of loan agreements or other financing arrangements to finance the sale of their goods and do not qualify as SMEs must also apply for a license by 31 May 2027. If they submit the application by that date, they may continue providing these services without a license until the licensing proceedings are concluded.
Practical Implications
The revamped licensing regime will significantly impact businesses that previously relied on the exemption for arranging credit to finance sales of their own goods or services but do not qualify as SMEs. These businesses will need to obtain a license for the first time if their activities fall within the scope of Section 34k GewO.
This is particularly relevant for large retailers, e-commerce platforms, marketplaces and financial service providers that integrate third-party consumer credit — i.e., “buy now, pay later,” invoice-based, installment or other point-of-sale financing — into their sales processes. If a company receives inducements or any other economic benefits from the lender or a third party, the company will generally be acting as a credit intermediary and will require a license under the new regime.
The updated regime will also impact existing credit intermediaries, who will need to ensure their employee remuneration arrangements align with the new rules for incentives, and independent advisers, who will need to make sure they are not receiving any fees from lenders.
Affected businesses should assess their licensing needs promptly and prepare for the application process where necessary.
Research assistant Laura Wagner contributed to this client alert.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.