Section 34k GewO: What Credit Intermediaries Need to Know

From 20 November 2026, significant changes will take effect for credit intermediaries in Germany. The intermediation of general consumer credit agreements will be governed by a dedicated licensing regime, accompanied by new requirements relating to professional competence, registration and continuing professional development.

Background

The reform stems from Germany’s implementation of Directive (EU) 2023/2225 on credit agreements for consumers. The implementing legislation amends the German Trade Regulation Act (Gewerbeordnung, “GewO”) and introduces a new standalone licensing regime for credit intermediaries under Section 34k GewO.

The objective of the European framework is to strengthen consumer protection and enhance the internal market for credit between businesses and consumers. Like its predecessor, the Directive follows a full harmonisation approach. As a general rule, Member States may neither introduce more stringent nor less stringent consumer protection requirements in areas covered by harmonised provisions.

What is a credit intermediary?

A credit intermediary is a person who, in the course of business, arranges credit agreements or introduces opportunities to enter into such agreements.

Residential mortgage credit agreements are excluded from the scope of the new regime and remain subject to the specialised framework applicable to mortgage credit intermediaries under Section 34i GewO.

The concept of credit intermediation is interpreted broadly. It extends beyond the actual arrangement of a credit agreement and includes certain preparatory and supporting activities carried out before or in connection with the conclusion of the agreement. By contrast, mere introducers who simply establish contact between a prospective borrower and a lender, without undertaking any further intermediation activities are not expected to fall within the scope of the new licensing requirement.

What changes will be introduced?

The most significant change is that only the intermediation of consumer credit agreements and certain forms of consumer financing arrangements will in future fall within the scope of the dedicated licensing regime under Section 34k GewO.
The intermediation of loans between businesses falls outside the scope of the new provision, as Section 34k GewO is linked specifically to consumer credit agreements and consumer financing arrangements. As a result, the commercial intermediation of loan agreements between businesses will no longer be subject to the licensing requirement under Section 34k GewO from 20 November 2026 onwards.

According to the explanatory comments to the legislation, there is no regulatory need for a licensing requirement under trade law in this area, particularly from a consumer protection perspective.

In addition, the intermediation of consumer credit agreements will become subject to a considerably more regulated framework. Eligibility for a licence will, among other things, be subject to professional competence requirements. New registration and continuing professional development obligations will also be introduced. In this respect, the new regime closely follows established regulatory frameworks for other regulated intermediary professions, most notably mortgage credit intermediaries under Section 34i GewO.

The legislation also introduces new requirements concerning remuneration structures. These must not impair the ability of credit intermediaries and their staff to act in the best interests of the borrower. In particular, remuneration arrangements must not be designed in a way that incentivises conduct contrary to the borrower’s best interests and should not be based solely on sales target.

Who will be affected?

The reform does not only affect traditional intermediaries of instalment loans and other consumer finance products.

It is particularly relevant for firms that currently intermediate consumer credit agreements under a licence pursuant to Section 34c GewO.

It may also affect market participants that, in addition to residential mortgage credit agreements within the meaning of Section 34i GewO, intermediate consumer credit agreements or consumer financing arrangements. Such businesses should assess whether they will require an additional licence under Section 34k GewO in the future.

What should existing credit intermediaries do?

Existing licences will not automatically convert into a licence under Section 34k GewO.

Any person who already holds a licence as a credit intermediary under Section 34c GewO before 20 November 2026 and wishes to continue carrying on activities as a credit intermediary within the meaning of Section 34k GewO must apply for a new licence by 31 May 2027. Otherwise, the existing licence as a credit intermediary will expire at the end of 19 November 2027.

For existing intermediaries, the legislation contains a so-called “experienced practitioner” exemption (grandfathering provision). Under this regime, the requirement to pass a professional competence examination may be waived where the individual has continuously worked, whether self-employed or employed, as a credit intermediary within the meaning of the current Section 34c GewO since 1 January 2021.

However, applicants must still submit their licence application by 31 May 2027 and provide evidence of uninterrupted activity during the relevant period.

Businesses should also assess whether they will be required to meet additional organisational requirements in the future. These include, in particular:

• registration obligations for the business and certain senior managers and responsible individuals;
• ensuring an adequate level of professional competence within the organisation; and
• compliance with the new continuing professional development requirements.

More generally, affected credit intermediaries should begin reviewing at an early stage:

• which products and customer groups are affected by the reform;
• which individuals within the organisation carry out intermediation or advisory activities;
• which persons may become subject to registration requirements; and
• how records of professional competence and continuing professional development should be maintained going forward.

Conclusion

Section 34k GewO establishes, for the first time, a standalone trade licensing regime for the intermediation of consumer credit agreements. The reform implements the new Consumer Credit Directive and will result in increased regulation and a further professionalisation of the consumer credit intermediation sector.

For credit intermediaries, the reform requires firms to take proactive steps to ensure compliance with the new regime. Firms should assess at an early stage whether their activities will fall within the scope of Section 34k GewO, whether existing licences under Section 34c GewO need to be replaced in time, and whether they satisfy the requirements of the transitional and grandfathering provisions.

Equally important will be the timely preparation of the relevant applications, supporting evidence and internal responsibilities.

Businesses affected by the reform should also review now whether their internal processes are capable of meeting the future requirements regarding professional competence, registration and continuing professional development.