Council adopts new rules on EU regulation of consumer credit

The Council has published its agreed position on the revision of the Consumer Credit Directive (Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC).

The revision of the Directive is predominantly intended to modernise and enhance the protection afforded to European users of consumer credit. Specifically, it seeks to promote responsible and transparent practices by all those involved in the provision of consumer credit, for example by ensuring that credit information is presented in a clear and understandable way, and is adapted to digital devices.

The Commission proposal significantly broadens the scope of products that will need to comply with stricter credit rules, for example by including:

  • loans below €200;
  • loans offered through crowdfunding platforms;
  • and ‘buy-now-pay-later’ products.

However, it is suggested that direct crowdfunding, deferred payment and deferred debit cards (under certain circumstances) and rental or leasing contracts where there is no obligation or option to buy the property should be excluded.

The Council has also proposed that a partial derogation be provided for ‘lower risk’ products such as credit loans of less than €200, overdraft facilities with terms of three months or less, interest free credit agreements etc.

The Council has further suggested that the pre-contractual information forms provided to consumers should be merged and restructured so that consumers are able to make more straightforward comparisons.

Duncan Scott