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CRD VI: What Does It Mean for U.S. Banks Lending Into Europe?
Reprinted from: Business Law Today | 05/05/2026Cadwalader partner Alix Prentice recently examined in Business Law Today the EU’s sixth Capital Requirements Directive (CRD VI), which takes effect January 11, 2027 and introduces significant restrictions on cross-border lending by non-EU banks into Europe.
CRD VI requires non-EU banks providing “core banking services,” broadly interpreted to include lending, trade finance, guarantees and commitments, to operate through a licensed European branch or subsidiary, with subsidiaries benefiting from passporting rights across the EU. U.S. banks without a European presence will need to restructure their lending models to remain compliant.
Alix highlighted several potential workarounds within CRD VI’s limited exemptions, including lending through nonbank entities such as credit funds or SPVs, relying on interbank exemptions via fronting arrangements with EU-based banks and carefully navigating reverse solicitation, which regulators are likely to interpret narrowly and apply on a case-by-case basis.
She also noted key timing considerations, including a grandfathering provision preserving existing contracts entered into before July 11, 2026, though material amendments after that date will not be protected. Banks are advised to lock in arrangements ahead of this deadline and ensure flexibility to transition structures without requiring borrower consent.
Read the full article here.
