EU provisionally agrees new Consumer Credit Directive

The European Parliament and Council have reached provisional agreement on updating EU rules on consumer credit. The new rules will cover credit agreements of up to €100,000. Key provisions will:

• require a creditworthiness assessment to be undertaken;
• give cancer survivors who apply for credit for which insurance is required the “right to be forgotten” after a certain time so their former illness does not affect insurance rates;
• require registration and supervision of non-bank creditors and intermediaries except micro enterprises and SMEs;
• require prominent warnings on credit advertisements, and banning advertisements from making certain claims;
• cap certain interest rates and charges;
• mandate forbearance measures;
• provide a 14 day cooling off period; and
• permit early repayment on terms that should be clear in pre-contractual information.