On 9 June, the Council of the EU should be able to adopt its position (‘general approach’ or political agreement) on the June 2021 proposal for a directive on consumer credit agreements, which aims to adapt Directive 2008/48/EC to the digital age, ensure better consumer protection, and guarantee harmonised conditions for credit companies.
After the widely supported second compromise proposal submitted on 17 May to the EU Council working group (see EUROPE 12957/15), the French EU Council Presidency made some adjustments which should allow the adoption, without debate, of a political agreement on Thursday 9 June, once the EU27 ambassadors to the EU (Coreper) have given their green light.
In essence, the draft text seen by EUROPE attempts to reconcile the different positions of the delegations, while maintaining the objectives of the original proposal.
Scope. To accommodate delegations, this would exclude:
- direct participatory credit services. These private lending services would be dealt with in a separate act. Participatory lending platforms, on the other hand, will be covered by the future directive when they act as a lender or credit intermediary.
- deferred payment. A clear distinction would be made with ‘buy now, pay later’ schemes, which will be covered.
- deferred debit cards, as this payment instrument allows households to better manage their expenditure on the basis of a monthly salary. Clarifications are made to clearly delimit this exclusion and avoid any risk of circumvention.
- rental or leasing contracts without obligation or option to purchase, as these contracts do not involve a transfer of ownership at the end of the contract and are more akin to the provision of a service.
Optional partial derogations would be provided for: - credits of less than €200; - contracts providing for the granting of credit in the form of an overdraft facility, repayable on demand or within 3 months at most; - credit agreements without interest and without other charges; - contracts with a maximum delay of 3 months and negligible fees.
Each Member State could therefore choose, for one or more of these types of credit, to opt for a regime that reduces the pre-contractual information and advertising requirements and removes the provision on early repayment.
Refusal of credit in case of negative credit assessment. The lender would not be able to grant credit in exceptional circumstances, when the credit assessment is negative.
Right of withdrawal. It would be limited to 1 year and 2 weeks, where the contractual information has not been provided to the consumer in accordance with the obligations of the directive, except where the information on the right of withdrawal itself has not been provided to the consumer.
Early repayment limited to costs imposed by the lender. The text specifies that the reduction of the total cost of credit in case of early repayment concerns the fees imposed by the lender and not the taxes or fees due to third parties.
Amendment of the term “rate ceiling”. The wording chosen allows account to be taken of national measures equivalent to rate ceilings which have proved to be effective and which also aim to protect the consumer from excessive rates or costs.
Admission procedure, registration and supervision of lenders other than credit institutions. These obligations would not apply to payment institutions already subject to EU rules for their credit granting activities related to payment services, and Member States could exempt merchants offering free credit on an ancillary basis or acting as credit intermediaries on an ancillary basis.
Penalties. There would be no obligation to apply a maximum amount of penalties of at least 4% of the lender’s annual turnover in case of serious cross-border infringement.
See the proposed general approach (in French): https://aeur.eu/f/1uv (Original version in French by Aminata Niang)