On 1 July 2025, the Act on Certain Consumer Credit Activities (2014:275), or LVK in Swedish, was formally repealed.
The change marks a significant shift in the Swedish consumer credit market: only banks and credit market companies authorised under the Banking and Financing Business Act (LBF) may now grant or mediate consumer credit.
For many consumer credit institutions, this means moving from a lighter regulatory regime to full banking supervision. The transition is already underway, and the deadline for licence applications is approaching.
Background: From LVK to LBF
Under the previous LVK framework, consumer credit institutions could operate under a specific licence with fewer requirements than those for banks and credit market companies.
The new legislation raises the bar. As of 1 July 2025:
- LVK is no longer valid for new business.
- Only authorised banks and credit market companies may provide consumer credit.
- Existing consumer credit institutions must apply for a new licence to continue operating.
The previous LVK will remain applicable until 31 July 2026 for companies that held a licence before 1 July 2025, provided they apply for authorisation before the end of July 2026.
If the application is submitted in time, the company may continue its operations until the Swedish Financial Supervisory Authority (Finansinspektionen, FI) has made a final decision.
Who is affected?
The most obvious group affected is existing consumer credit institutions. Since the legislative change entered into force, the number of such institutions has already decreased, and only a limited number have obtained authorisation as credit market companies.
However, other institutions that have been able to grant consumer credit under different regulatory frameworks are also affected. These include:
- Payment institutions
- Electronic money institutions
- Housing credit institutions
From 31 July 2026, these actors must cease providing consumer credit unless they obtain authorisation as a bank or credit market company.
Finansinspektionen has contacted all consumer credit institutions, requesting clarity on whether they intend to apply for a new licence or wind down their business.
Stricter requirements, higher thresholds
This transitioning entails substantially higher requirements, such as:
- Capital and financial stability: Stronger capital base and balance sheet requirements apply to banks and credit market companies, increasing resilience and long-term stability.
- Governance and risk management: More comprehensive internal governance frameworks are required, including structured risk management, internal controls, and documented processes.
- Reporting and supervision: More detailed and frequent reporting to FI, alongside ongoing supervisory engagement under banking legislation.
- Compliance and ongoing monitoring: Continuous oversight, risk assessments, and internal compliance functions aligned with full banking regulation.
How Trapets supports your transition
Moving into a banking or credit market company framework means strengthening your AML and compliance setup across the full lifecycle, from onboarding to ongoing monitoring and reporting.
Trapets provides end-to-end AML coverage in one connected platform, supporting:
KYC and customer due diligence
Our solution for KYC and due diligence supports onboarding, risk classification, and ongoing reviews. With configurable questionnaires, automated triggers, and integrated screening, you can manage onboarding and periodic reviews with full traceability and audit readiness.
Screening and real-time risk
Screen customers against sanctions, PEP, adverse media, and UBO data, and calculate risk in real time through API-based assessments. This strengthens onboarding decisions and ongoing due diligence, aligned with stricter supervisory expectations.
Transaction monitoring and reporting
As requirements increase, effective transaction monitoring becomes central. Trapets enables institutions to configure risk models, detect suspicious patterns, generate alerts, and submit reports, all within a unified environment.
Trapets supports organisations at every stage of this journey, helping you stay ahead of financial crime with technology and expertise you can trust.
Interested in learning more about AML solutions? Our experts are here to help you.
Further reading: https://www.fi.se/sv/bank/sok-tillstand/konsumentkreditinstitut/