Revision of directive modernizes/enhances protection for consumers applying for credit and promotes responsible and transparent practices by all involved in consumer credit.
Ensures credit information presented in clear way and adapted to digital devices.
Scope
To keep up with the trend of digitalization, the new credit rules also apply to certain risky loans that are excluded from the scope of the directive currently in force.
Loans below €200, loans through crowd-lending platforms, buy-now-pay-later goods.
Consumer Protection
The directive will ensure consumers make informed choice when applying for credit.
Before signing a credit agreement, a lender must make sure consumers have easy access to all necessary information and are informed about the total cost of the credit.
Lenders must assess consumer's creditworthiness so as to ensure that consumers are protected from irresponsible lending practices that could lead to over-indebtedness.
Creditworthiness Assessment
New consumer credit rules make improvements to creditworthiness assessment rules.
By which the creditor assesses whether a consumer is able to repay its loan.
When assessment is negative, a creditor cannot make credit available to the consumer.
This will protect consumers from receiving credit that they are not able to repay.
Next steps
The provisional agreement is subject to the approval by EU CNCL, EP.
Sep. 18, 2023 EU CNCL Note
On Sep. 18, 2023, EU CNCL issued information note dated Sep. 15, concerning the outcome of the European Parliament's first reading of the proposal for a directive.
When it voted on Sep. 12, 2023, the plenary adopted the compromise amendment (amendment number 232) to the abovementioned proposal for a directive.
The Commission's proposal as thus amended constitutes the Parliament's first-reading position which is contained in its legislative resolution as set out in the Annex.
EP's position reflects what had been previously agreed between the institutions.
The Council should therefore be in a position to approve the Parliament's position.
Act would then be adopted in the wording which corresponds to Parliament's position.
Sep. 20, 2023 Legislative Act
On Sep. 20, 2023, EU CNCL issued final version of act (PE-CONS 22/23) for adoption.
Sep. 22, 2023 EU CNCL I/A Item Note
On Sep. 22, 2023, EU CNCL issued an I/A item note on adoption of the legislative act.
EP adopted position at first reading on Sep. 12, voting outcome reflects compromise agreement reached between the institutions, so should be acceptable to EU CNCL.
EU CNCL therefore asks Permanent Representatives Committee to confirm agreement and to suggest that CNCL approve EP position as an A item at a forthcoming meeting.
If EU CNCL approves EP position, the legislative act will be adopted, after being signed by Presidents of EP and EU CNCL, legislative act will be published in Official Journal.
A statement from Italy on the directive is included as an addendum to the note.
Italy supports agreement on directive, though not entirely satisfied with the rules on forbearance measures, but overall sees it as good balance between need to protect consumers from risks in borrowing in digital market and promoting competitiveness.
Expects EU CMSN, member states to maintain close attention to developing business models and allow for any adjustments to ensure effectiveness of rules over time.
Document dated Sep. 22, 2023, was received on Sep. 23, 2023 due to a fixed feed.
Sep. 28, 2023 Consumer Over-Indebtedness Report
On Sep. 28, 2023, EU CMSN published a study on EU consumers' over-indebtedness and its implications, with annexes providing reports on different EU member states.
The study aims to provide updated mapping of the situation, nature and causes, effects and initiatives for alleviating the impact of consumer over-indebtedness in EU.
Part of the study was a behavioral experiment focused on assessing the capacity of households and consumers to make informed and optimal choices about credit.
Document dated Sep. 28, 2023, received from EU CMSN Sep. 29, summarized Oct. 4.
Oct. 9, 2023 EU CNCL Adoption
On Oct. 9, 2023, EU CNCL confirmed its adoption of the new consumer credit directive.
Directive aims to enhance the protection for European consumers applying for credit.
Revised legislation repeals the current 2008 directive on consumer credit agreements.
The new directive ensures that credit information, such as the total cost of credit is presented in a clear and understandable manner and is adapted to digital devices.
Establishes advertising rules to reduce abusive credit to over-indebted consumers and creates effective measures against overcharge; requires lenders to assess whether consumers can repay credit, so they are protected from over-indebtedness.
Enlarges scope of the directive to loans below €200 and buy-now-pay-later products.
Also gives consumers the right to terminate a credit agreement within 14 days, and gives cancer survivors the right to be forgotten; following the Council’s approval of the provisional agreement, the legislative act has been adopted.
After being signed by the President of EP and President of Council, the directive will be published in EU OJ and will enter into force on twentieth day following its publication.
Oct. 12, 2023 EU CNCL Voting Result
On Oct. 12, 2023, EU CNCL issued note dated Oct. 10, containing outcome of voting.
Directive shall enter into force on 20th day following publication in the Official Journal.
Member States shall adopt/publish, by 24 months from the date of entry into force, the laws, regulations and administrative provisions necessary to comply with directive.
They shall immediately communicate the text of those provisions to the Commission.
And they shall apply those measures from 3 years after the date of entry into force.
Oct. 30, 2023 Official Journal
On Oct. 30, 2023, EU CNCL issued CCD II Dir 2023/2225 on consumer credit agreements; Member States shall adopt and publish, by Nov. 20, 2025, the laws, regulations and administrative provisions necessary to comply with the directive.
They shall apply those measures from Nov. 26, 2026; directive shall enter into force on the 20th day following that of its publication in the Official Journal, Nov. 19, 2023.
