Brussels, 2 December 2022
The European Commission welcomes the provisional political agreement reached yesterday between the European Parliament and the Council on the core elements of the new EU rules on consumer credit, following the Commission’s proposal in June 2021. With this agreement, the Consumer Credit Directive is reviewed to ensure it is adapted to the digital era, providing higher protection for consumers taking out credits online. It will provide for stronger rules, a level-playing field for all credit operators and for fair access to credit. The new rules will cover new forms of credits often proposed online, such as Buy Now Pay Later schemes, and short-term, high-cost loans, to ensure consumers are protected against the risks such credits can entail. They will also ensure improved assessment of the consumers’ ability to repay and make sure that the cost is limited, through measures such as caps on interest rate, the annual percentage rate of charge or the total cost of the credit.
Vice-President for Values and Transparency, Věra Jourová, said:
“The cost-of-living crisis fuelled by Russia’s war against Ukraine has put millions of consumers in financial difficulty, and an increasing number of Europeans are taking credits to finance their needs. It is crucial that consumers are properly protected against unfair practices, and that they benefit from the highest safeguards when taking a credit online, just as much as they do offline.”
Commissioner for Justice, Didier Reynders, added:
“In the current cost-of-living crisis, where consumers may need to use credit for their basic needs, it is absolutely crucial to ensure they have adequate information and protection. The digitalisation process, enhanced by the pandemic, profoundly changed the financial sector, and new forms of credit are being proposed to vulnerable consumers online. The new rules will contribute to increasing consumer confidence and will foster responsible practices, both online and offline.”
The European Parliament and the Council now need to formally adopt yesterday’s political agreement. More information can be found online.
Source – EU Commission