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EP: Europese markt voor privé-leningen nodig (en)

Met dank overgenomen van Europees Parlement (EP), gepubliceerd op dinsdag 11 december 2007.

Two out of three Europeans use credit to buy furniture, a washing machine or a car. Yet the market in consumer credit is still a national one. The EP Internal Market Committee voted on Monday on plans to stimulate the European market while still protecting consumers.

The draft directive aims to harmonise consumer credit contracts in a number of areas, such as information provided to consumers before contracts are signed and when they are concluded, calculations of the total cost of a loan, the right to cancel and the right to pay off a loan early.




What will change?

The day the new directive enters into force, all EU consumers will have the right to the same information for choosing the best offer in their country or another EU Member State. Consumers will also be able to benefit from bank products that are not available in their own country. The directive also lays down the standard information that must be mentioned in advertising containing financial information on a loan. The aim is to enable consumers to take fully-informed decisions. The lender will also be expected to provide information on both the benefits and the drawbacks of the loan offer.

Harmonisation will go even further as regards the information to accompany the signing of the contract. It will also be easier to calculate the total cost of a loan. Definitions will be standardised EU-wide and will be used as a basis for calculating the annual percentage rate of charge (APR). Other definitions will be standardised, for example concerning overdraft facilities.

One priority is to protect consumers against taking on too much debt. The information provided by the lender must enable the borrower to take a responsible decision. The lender must also assess the solvency of the consumer before concluding a contract. Databases accessible by banks should make it easier to meet this requirement. Where legislation providing for similar measures already exists in a Member State, these mechanisms will be preserved. In other cases, they will have to be set up.

The new directive also gives consumers the right to pay off loans early and stipulate the rules by which the lender can calculate the compensation to be paid by the client. A right of cancellation within 14 days will also apply EU-wide.


What loans are covered by the directive?

The new legislation will cover consumer loans between €200 and 50,000. It will only cover credit contracts, not guarantors and other aspects of credit agreement law. The directive will apply only to loan contracts on which interest is paid, and not products such as deferred payment cards (charge cards).


What will be the benefits?

The new legislation should enable the European economy to take advantage of the potential for the development of crossborder trade in consumer credit. Removing obstacles should boost competition and prompt credit institutions to improve performance, by diversifying and enhancing their products for Europe's consumers. 

The situation varies greatly from one Member State to another, both in legal terms and as regards the credit habits of households, a situation which does not make harmonisation easier. In addition, the right balances must be struck. On the one hand, easier credit must not lead to a debt burden on households. On the other, consumer protection must not generate costs that could be intolerable to the financial health of banking institutions.


Next steps

The draft directive, currently at the second reading stage, has been in the pipeline since autumns 2002. MEPs have tabled 236 amendments to the common position of the Member States. The text will be put to the vote at Parliament's plenary session in January. Parliament and Council are expected to hold negotiations ahead of the vote in the hope of reaching a compromise.


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