Cap. 645 Art. 12Ability to hold funds.

(1) When a credit servicer intends to receive and hold funds on behalf of borrowers as part of its business model in accordance with this Act, such funds shall, in accordance with the provisions of any applicable laws, be protected in the interest of the credit purchasers against the claims of the other creditors of the credit servicers, in particular in the event of insolvency.

(2) When a credit servicer intends to receive and hold funds on behalf of borrowers as part of its business model in accordance with this Act, and a borrower makes a payment to that credit servicer in order to partially or totally reimburse the amounts due related to a creditor’s rights under a non-performing credit agreement, or to the non-performing credit agreement itself, that payment shall be deemed to have been paid to the credit purchaser.

(3) When a credit servicer intends to receive and hold funds on behalf of borrowers as part of its business model in accordance with this Act, that credit servicer shall be required to deliver a receipt or a letter of discharge to the borrower on paper or another durable medium, whenever the credit servicer receives funds from the borrower, acknowledging the amounts received.

(4) Credit service providers shall not be permitted to receive and hold funds from borrowers.