Consumer Credit Directive (CCD) - Evaluation by the European Commission

In 2014, implementation checks of the Consumer Credit Directive (CCD) pointed out certain shortcomings of the Directive. The market has significantly evolved, and several other EU pieces of legislation were adopted in different fields also relevant for the provision of consumer credit. The Commission therefore launched an evaluation of the Directive (first Roadmap in 2018).

BIPAR responded to several consultations in this respect, recalling that the presence of credit intermediaries always represents an additional guarantee of consumer protection through professional services and advice. BIPAR also provided comments on points where a change of the CCD would be beneficial (single licence for intermediaries, cross-selling…) and where no change is needed: considering differences in national markets, extensions to the scope should be left at national level and based on study and facts; no changes are needed regarding remuneration, and in any discussions concerning remuneration of intermediaries, a level playing field between credit intermediaries and direct lenders/other distributors has to be guaranteed.

The CCD review is a key feature of the Commission’s “New Consumer Agenda” and in 2020 BIPAR reiterated its views on CCD in the consultation on the Consumer Agenda as well (see dedicated article).

In November 2020, the European Commission published the results of its evaluation of the CCD. It states that the review will assess potential options to ensure better consumer information, taking into account the impact of digitalisation, as well as strengthened consumer protection from irresponsible lending practices, particularly those spread online. In the framework of the Covid-19 crisis, special attention will also be paid to over indebtedness and debt advice.

In March 2021 BIPAR attended a European Parliament meeting on the benefits and challenges of digitalisation of retail financial services especially taking into account how the Covid-19 pandemic has affected consumer protection in this area and focusing on the CCD and the DMD reviews.

For the CCD, the Commission's representative stated that key points for the Commission were to:

  • extend consumer protection to new operators such as peer to peer lending platforms and also new products like short-term high-cost loans.
  • update the disclosure requirements to reflect digitalisation and online contracts.
  • stress the effectiveness of the creditworthiness assessment rules so this assessment is done in the interest of the consumer.
  • ensure support to over-indebted consumers or people in difficulty.

Commission's consumer credit sweep

In April 2021, the European Commission announced the results of a “sweep”[1] it carried out on consumer credit. The primary objective of the sweep was to check on various technical devices (PC, tablets and smartphones), whether traders comply with EU consumer rules on standard information in online advertising of consumer credit, if the overall presentation of the consumer credit offers cannot mislead consumers, and if the offers do not aggressively exploit consumer vulnerabilities.

The Commission found that online consumer credit is a fast-growing market and that the impact of the Covid-19 crisis is only set to drive the demand for quick credit solutions higher. More than one third of the swept websites were flagged for potential irregularities with EU consumer law.

Next steps

The Commission has announced the publication of a proposal for revision of the CCD for the end of the second quarter of 2021 “to reinforce consumer protection in the context of the digitalisation of retail financial services”.

Regarding the sweep, participating authorities will now follow up on the flagged cases based on their national rules on investigation and enforcement.

[1] A sweep is a set of checks coordinated by the Commission and carried out on websites simultaneously by national enforcement authorities in participating countries, to identify breaches of EU consumer law in a particular sector.

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