MEPs on the European Parliament’s Committee on the Internal Market and Consumer Protection want to protect consumers as much as possible against overindebtedness stemming from risky online loans, as these are complex and too easy for consumers to take out without these individuals necessarily having the means to repay them, especially in these times of crisis.
Reflecting this point (see EUROPE 12957/15), the report by Kateřina Konečná (GUE/NGL, Czech Republic) was adopted on Tuesday, 12 July, by an overwhelming majority (42 votes in favour, 1 against, and 1 abstention). This markedly strengthens the June 2021 proposal for a directive on consumer credit agreements, which modernises Directive 2008/48/EC that it will repeal (see EUROPE 12752/3).
Scope. According to MEPs, the legislation should cover credit agreements up to €150,000, and it would be up to the competent national authorities to determine the actual upper limit based on the Member State’s specific economic situation.
Member States can reportedly exclude small-value loans up to €200, those granted free of interest and without any other charges, or loans that must be repaid within 3 months and with minor charges.
Creditworthiness assessment. To strengthen this assessment, MEPs added requirements, including information on the consumer’s obligations when he or she takes out the loan or the cost of living.
The consumer’s social media data and health data should not be taken into account, and the right to be forgotten should be respected.
In addition, the European Banking Authority (EBA) is expected to develop guidelines detailing how creditors and crowdfunding service providers conduct this creditworthiness assessment.
Pre-contractual information. In the interest of providing the most comprehensible information possible, consumers should always obtain standard information so that they can compare different offers and understand the legal and financial consequences of loans and credit costs. This information should be clear and viewable at a glance, even on a mobile phone.
Moreover, consumers should be reminded that they have the right to withdraw from the credit agreement or the agreement for the provision of crowdfunding services within 14 calendar days without having to give a reason for the withdrawal.
Advertising for credit agreements. In any case, advertising should contain a clear and prominent warning that borrowing money costs money.
The Council of the EU—which decided its position last June—is ready to negotiate with the European Parliament once it has settled on its position (see EUROPE 12968/5), possibly in the autumn. The date could be announced in September.
See the text that was voted on: https://aeur.eu/f/2ld (Original version in French by Aminata Niang)